Peer-to-Peer Energy Trading in the Real World: Market Design and Evaluation of the User Value Proposition

Electricity markets are experiencing a shift to a more decentralized structure with small distributed renewable generation sources like residential photovoltaic systems. Simultaneously, information systems have driven the development of a “sharing economy” also in the electricity sector and can enable previously passive consumers to directly trade solar electricity in local communities. However, it is unclear how such peer-to-peer (P2P) markets should be designed to create value for the user. In a framed field experiment, we design and implement Switzerland’s first real-world P2P electricity market in a local community. We examine its value proposition for the users and elicit user preferences by enabling the participants to directly influence buy and sell prices for local solar energy. The collected empirical evidence suggests that the P2P exchange is beneficial for users and provides incentives for generation of renewable energy. The results create valuable insights for the design and diffusion of future energy markets

Fostering Sustainability Using Information Technology: Real-Time Feedback, Incentives, and Smart Markets

Despite growing public attention and policy efforts for environmental sustainability, world-wide energy consumption and greenhouse gas emissions are still increasing (International Energy Agency, 2020a). Technological advances have enabled improvements in energy efficiency, and hundreds of billions of US dollars are being invested in renewable energy generation every year (International Energy Agency, 2020a), however, actually implement- ing these technologies requires changes to commercial practices, regulatory frameworks, and market structures. The replacement of conventional energy generation by renew- able resources is advancing rather slowly (International Energy Agency, 2020b), as their integration requires a fundamental transition in the energy sector. Energy that was traditionally supplied by few power plants is now generated in smaller, distributed renewable generators that are not centrally controlled. The resulting growing number of stakeholders and increasing volatility in supply challenges existing market structures, as well as the grid infrastructure. Beyond technological and structural aspects, human behavior is what ultimately drives energy consumption and the adoption of renewable technologies. Consumer choices have a massive impact on resource use, as residential households consume more than 20% of the worldwide total final energy consumption (International Energy Agency, 2020a). Likewise, personal transportation makes up roughly the same amount in most countries (eurostat, 2017; International Energy Agency, 2020a). However, empirical data and research studies reveal a persistent gap between individuals’ intentions for environmentally-friendly behavior and their actual energy consumption and associated emissions. Information and communication technology can play a pivotal role in advancing the energy transition. Ubiquitous connected devices and the data they capture can be useful tools to identify inefficient consumption patterns or the potential for investments in new technologies. By capturing, analyzing, and evaluating energy data in high granularity, information technology can support sustainable practices – not only on a macro- or organizational level, but also on the individual level. Yet, given the recency and fast pace of technological progress in this area, existing research has mostly focused on the technical capabilities of information and communication technologies in environmental contexts. There is a lack of empirical and applicable knowledge on the impact of such ‘green’ information systems in the real world. To tackle this issue, this thesis examines different ways in which information technology can foster sustainability in the real world, a) among individual consumers and b) in integrating renewable energy resources into the energy market. To that end, state-of-the-art information systems designed in conceptual studies are deployed in field experiments. In the studies presented, a smart metering device, a blockchain system, and an autonomous intelligent agent are designed based on recent work from the computer science discipline. To understand the behavioral effects in real-world settings, field experiments are conducted. The design and implementation of these field experiments builds on theories from psychology and economics research. Herein, the work presented in this thesis compliments conceptual research on information systems (IS) with a social-science perspective and empirical validations. This dissertation demonstrates that information systems can indeed spur the energy transition and foster sustainability, both on the individual consumer level and on the market level. The findings from large-scale field experiments generate novel empirical insights and contribute to the impact-oriented work on green information systems. A multi-disciplinary approach leveraging state-of-the-art technologies (blockchain technol- ogy, agent-based simulation, and reinforcement learning) and testing them in the field expands existing conceptual knowledge to a more holistic understanding. The research presented shows that, by incorporating behavioral factors and economic incentives, information systems can induce energy conservation in the real world and encourage renewable energy generation – and thus tackle some of the wicked problems of our time

The Role of Self-Set Goals in IS-Enabled Behavior Change

IS-enabled feedback interventions and self-tracking devices have shown to successfully induce behav- ior change in various professional and private domains. However, in particular for private contexts, the mechanisms that govern these processes are not well understood. Based on goal-setting theory, we identify self-set goals as a potential driver of behavior change induced by IS-enabled feedback. In a two-month field study, we provide activity-specific real-time feedback on resource consumption to 413 households and study the formation of self-set resource conservation goals in response. We chose showering as an example of an energy-intensive, habitual low-involvement target activity. The results suggest that IS-enabled real-time feedback successfully induces most individuals to set themselves a goal without exhortation, even for this kind of low-involvement activity. Against the predictions of goal-setting theory, we find that individuals tend to set themselves ambitious goals. In line with goal- setting theory, individuals who set themselves ambitious goals conserve more resources. Given the difficulty of defining adequate goals externally, and the risk of goal rejection and adverse reactions associated with externally assigned goals, the results suggest that personal IS should encourage users to self-set goals

Real-time feedback promotes energy conservation in the absence of volunteer selection bias and monetary incentives

ISSN:2058-754

Real-time feedback reduces energy consumption among the broader public without financial incentives

ISSN:2058-754

Peer-to-Peer Energy Trading in the Real World: Market Design and Evaluation of the User Value Proposition

Electricity markets are experiencing a shift to a more decentralized structure with small distributed renewable generation sources like residential photovoltaic systems. Simultaneously, information systems have driven the development of a “sharing economy” also in the electricity sector and can enable previously passive consumers to directly trade solar electricity in local communities. However, it is unclear how such peer-to-peer (P2P) markets should be designed to create value for the user. In a framed field experiment, we design and implement Switzerland’s first real-world P2P electricity market in a local community. We examine its value proposition for the users and elicit user preferences by enabling the participants to directly influence buy and sell prices for local solar energy. The collected empirical evidence suggests that the P2P exchange is beneficial for users and provides incentives for generation of renewable energy. The results create valuable insights for the design and diffusion of future energy markets

User behavior in a real-world peer-to-peer electricity market

Peer-to-peer (P2P) energy markets are a widely discussed approach toward a sustainable energy supply that allows private owners of distributed energy resources (e.g., solar panels) and consuming households to trade energy directly without intermediaries. P2P energy markets are expected to contribute to a green, local, and fair energy system in the future. The approach implies a paradigm shift regarding the role of citizens who evolve from passive consumers into active market participants. While first existing research primarily focused on the technical feasibility of such scenarios, end users and their role in P2P markets have received little attention. The present article studies the behavior of 35 households and two commercial entities in Switzerland's first real-world P2P energy market. In this unique real-world setting, based on a mixed methods approach, we developed and deployed a web application and empirically studied interaction, acceptance, and participation in electricity pricing in this P2P energy market, using data from system logs, surveys, and interviews. The findings are threefold. First, the P2P energy market was well received among its users, indicated by comparably high and stable usage activity of the web application throughout the study (4.5 months). Second, users in the sample are heterogeneous; based on their engagement with the web application and their stated preferences, they can be categorized into those who want to actively set prices (30%); those who prefer automated prices determined by an information system (35%); and non-users/non-respondents to surveys (35%). Third, an analysis of interviews with nine households suggests that P2P energy markets may increase the salience of renewable energies and may promote load-shifting activities. Thus, the article provides empirical insights about the user behavior of households and their future role in decentralized energy scenarios.ISSN:0306-2619ISSN:1872-911

Bidding on a Peer-to-Peer Energy Market: An Exploratory Field Study

Moving toward sustainable energy systems to address climate change is one of the key challenges of our generation. To that end, investments in renewable energy and balancing renewable supply and energy demand on the larger scale are crucial. One mechanism to create price signals for demand balancing, as well as for consumer engagement, is to establish trading platforms (or peer-to-peer (P2P) markets) through which households can directly buy and sell renewable energy. However, residential consumers are typically lay users with little or no previous exposure to the complexity and the dynamics involved in energy markets. More so, empirical research on consumer engagement in the energy sector indicates that individuals tend to act against their stated proenvironmental intentions and to lose interest in energy management systems particularly quickly—calling into question regulatory efforts to foster P2P markets to push the transition to renewable energy. We have implemented the first empirical study worldwide that analyzes bidding behavior in a real-world P2P energy market, in which users bid for solar energy via an auction mechanism. For the duration of an entire year, users could interact with the market using a web app. The prices settled on the P2P market directly impacted participants’ electricity bills. We provide unique empirical evidence showing that (1) participants were willing to engage in energy trading and that (2) they understood the market mechanism surprisingly well and exhibited learning effects. Still, bidding behavior did not reflect their stated intention of paying a price premium for local solar energy. The market outcomes reveal that P2P energy markets can indeed have a positive impact on balancing demand and supply, thereby addressing the fundamental challenge of distributed renewable energy systems.ISSN:1047-7047ISSN:1526-553