GJETC Report 2020 German-Japanese Cooperation in Energy Research - Supporting the closure of implementation gaps
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GJETC Report 2020 German-Japanese
Cooperation in
Energy Research
Supporting the closure of
implementation gaps
Key Results and Policy
Recommendations
REPORT 2020 REPORT 2020
This report is based on the work of the German-Japanese Energy
Transition Council (GJETC). The work of the GJETC was financed
Organisation by the German Federal Environmental Foundation (DBU), the
Stiftung Mercator Foundation, the German Federal Foreign Office
and the Japanese Ministry of Economy, Trade and Industry (METI).
Furthermore, it was supported by the German Federal Ministry
for Economic Affairs and Energy (BMWi), the German Federal
Ministry for the Environment, Nature Conservation and Nuclear
Safety (BMU), the Japanese German Center Berlin (JDZB) and
Medienbüro am Reichstag (MaR) (media partner). Responsibility
for the contents of this publication lies with the authors.
Funding
Please cite the report as follows
Wuppertal Institut; Institute of Energy Economics, Japan (2020):
German-Japanese Cooperation in Energy Research: Supporting
the closure of implementation gaps. GJETC Report 2020.
Wuppertal/Tokyo.
Project term
October 2018 – September 2020
Project coordination
Stefan Thomas/Hisashi Hoshi.
Authors
Members of the GJETC: Prof. Dr. Masakazu Toyoda,
Prof. Jun Arima, Dr. Yasumasa Fujii, Dr. Toshiharu Ikaga,
Support Dr. Koji Nomura, Junichi Ogasawara, Dr. Kazuhiko Takeuchi,
Dr. Kentaro Tamura, Prof. Dr. Peter Hennicke, Dr. Harry Lehmann,
Prof. Dr. Andreas Löschel, Dr. Felix C. Matthes, Manfred
Rauschen, Dr. Carsten Rolle, Franzjosef Schafhausen,
Prof. Dr. Miranda Schreurs, Dr. Stefan Thomas.
Members of GJETC study teams and working groups
Digitalization and the Energy Transition
Dr. Harry Lehmann, Dr. Yasumasa Fujii, Dr. Yasushi Ninomiya,
Dr. Stefan Thomas, Judith Schröder
Hydrogen society
Expression of thanks
Dr. Carsten Rolle, Dr. Koji Nomura, Yoshiaki Shibata, Tomoko
Matsumoto, Sichao Kan, Dr. Akiko Sakekawa, Dr. Stefan Thomas,
Naomi Gericke and Sabine Nanning
GJETC Report 2020 German-Japanese
Cooperation in
Our special thanks goes to the German Federal Environmental Foundation (DBU),
the Mercator Foundation, the German Federal Foreign Office, METI and the Ger- WG1 Long-term Scenarios and Monitoring Mechanisms Energy Research
man-Japanese Center, Berlin, and the Medienbüro am Reichstag, and personally Dr. Felix C. Matthes, Prof. Dr. Jun Arima, Prof. Dr. Andreas Lö-
to Hirohide Hirai (METI), Takafumi Kakudo (METI), Tomohiro Kaneko (METI), Ma- schel, Prof. Dr. Peter Hennicke, Ichiro Kutani and Gerald Zunker
sayoshi Yamakage (METI), Andreas Feicht (BMWi), Ellen von Zitzewitz (BMWi), Dr.
WG2 Energy Efficiency in Buildings
Supporting the closure of
Christine Falken-Großer (BMWi), Prof. Klaus-Dieter Borchardt (DG Energy, Euro-
pean Commission), Dr. Karsten Sach (BMU), Harald Neitzel (formerly BMU), and Manfred Rauschen, Dr. Toshiharu Ikaga, Dr. Stefan Thomas, implementation gaps
Berthold Goeke (BMU). Hisashi Hoshi, Bernd Winterseel, Jan Karwatzki
We would also like to thank Dr. Torsten Bischoff (Trianel GmbH), Dr. Olaf Böttcher
(Federal Institute for Research on Building, Urban Affairs and Spatial Development),
Markus Gräbig (50 Hertz), Dr. Yoshitsugu Hayashi (Chubu University), Miha Jens-
WG3 Transport and Sector Coupling
Dr. Yoshitsugu Hayashi, Martin Schmied, Ulrich Jansen, Thorsten
Key Results and Policy
terle (Adelphi), Mara Marthe Kleiner (Agora Energiewende), Jana Narita (Adelphi), Koska, Yoshiaki Shibata, Ichiro Kutani Recommendations
Christian Noll (DENEFF), Dr. Takao Sawachi (Building Research Institute), Dr. Kentaro
Tamura (IGES), Dr. Geert Tjarks (NOW), Steffen Riediger (Director European Power WG4 Integration Costs of Renewable Energies
Derivatives European Energy Exchange AG), Dr. Boris Rigault (Siemens AG), and Dr. Yuhji Matsuo, Dr. Stefan Thomas, Prof. Dr. Andreas Löschel
Jochen Schwill (NEXT Kraftwerke).
Members of the scientific secretariats
We also express our special thanks to the German-Japanese study groups for Hisashi Hoshi, Ichiro Kutani, Yasuhide Arai, Ryoko Kawaguchi,
conducting the analyses of the GJETC and making important contributions to the Dr. Stefan Thomas, Maike Venjakob, Naomi Gericke,
GJETC discussions (see Appendices: www.gjetc.org/report). Judith Schröder, Lisa Kolde
2 3
REPORT 2020 – CONTENT
Preface 6
1. Introduction 8
2. Policy recommendations by the GJETC 12
3. Studies and Working Group results and specific recommendations 20
3.1 Digitalization and the energy transition 22
3.2 Hydrogen society 32
3.3 WG1: Climate & energy policy; targets, plans and strategies.
The role of monitoring and evaluation mechanisms 42
3.4 WG2: Energy efficiency in buildings 48
3.5 WG3: Transport and sector coupling 54
3.6 WG4: Integration costs of variable renewable energy sources 58
4. Further research needs 62
4.1 Digitalization and the energy transition 64
4.2 Hydrogen society 66
4.3 Climate & energy policy; targets, plans and strategies -
The role of monitoring and evaluation mechanisms 66
4.4 Energy efficiency in buildings 68
4.5 Transport and sector coupling 69
4.6 Integration cost of renewable energy sources 69
5. The GJETC as a role model of bilateral cooperation 70
6. Concluding remarks 80
References 81
List of figures and tables 83
List of abbreviations 84
IMPRINT 86
4 5
REPORT 2020 REPORT 2020
consequences of climate change are currently the future. By firmly creating a virtuous cycle
Preface
presented in the form of probability statements between the environment and growth, Japan will
and future scenarios. In this respect, more am- take the lead in making a paradigm shift in glob-
bitious energy and climate policy can only be al environmental policy. The most important key
based on an understanding of the anticipated to achieving the ultimate goal of a carbon free
After four years of constructive cooperation, this report by the GJETC
dismay of all of us. We would all like to block society is innovation” (Prime Minister Shinzo Abe,
was discussed and approved by the members of the GJETC in March 2020
out the image of living in a „hothouse earth“1, ibid.). “Virtuous cycle” in this context means that
from their home offices via electronic communication channels. In this
as this is perceived as still being in the distant protecting the environment and new patterns of
respect, it has been thoroughly effected by the coronavirus pandemic. future, even the consequences of this may far (decarbonized) economic growth can mutually
surpass those of the coronavirus pandemic. In and positively reinforce each other. This under-
order to transfer anticipated dismay to current standing follows a paradigm shift that is gaining
willingness to act, responsible science must more and more official acceptance in other parts
simultaneously demonstrate the consequences of the world too, especially in Germany.3
of non-action as well as opportunities for action
using the best possible scientific tools. In the same vein, when aiming to limit the
economic effects of the coronavirus crisis, we
With all of its activities (e.g. a large study pro- recommend that stimulus packages to reduce the
gram, many individual studies and impulse pa- damage should focus on clean energy technol-
pers, outreach events, and stakeholder dialogues), ogies, including both further development of
the GJETC has concentrated on opportunities traditional zero-carbon energy and new devel-
for joint action to foster a just and economically opment of decarbonizing hydrocarbon, to avoid
feasible, if not attractive, energy transition in both rebound effects in terms of CO2 emissions after
countries. After four years of common intensive the economy recovers.4
scientific policy advice, while certain cultural, geo-
graphical and energy policy differences remain, Identifying technological and social innovations,
the similarities prevail and there is a resolute will cooperating to find the best common solutions,
to solve problems faster through cooperation encouraging public acceptance of a just tran-
The pandemic has shone a spotlight on the previously thought impossible. In both Germany than by advocating nationalist strategies. sition to a fully decarbonized economy, and
vulnerability and connectivity of our “One World” and Japan for example, extensive “rescue pack- building trust through evidence-based research 1 https://www.pnas.org/
like no other event for decades. Influenced by ages” for the economy (e.g. budget allowances The coronavirus pandemic took humanity by and solidarity are the pillars of the work of the content/115/33/8252
immediate concern for and acute health risks to to compensate for reduced working hours, free- surprise, like a massive natural event; the causes GJETC. We look forward to building a new phase 2 See Prime Minister and
his Cabinet (2019): Press
millions of people, the world community was late lancers, and small businesses) that were ready are still unclear and the damage inflicted is of cooperation on these pillars in support of the release, online available
in coming to a decision, but then most countries for implementation were swiftly adopted. devastating. Not so with climate change: We can German-Japanese Energy Partnership, and recom- under https://japan.
kantei.go.jp/98_abe/ac-
responsibly implemented comprehensive counter- predict many of the catastrophic consequences mend that the public see the GJETC as a potential tions/201906/_00031.html
measures that had previously not been considered Our condolences go to the victims of this cata- of inaction regarding climate mitigation with “role model” for international cooperation.
3 See e.g. the study of The
possible. These measures and programs were all strophic health and economic crisis all over the a high degree of certainty; on the other hand, Boston Consulting Group
the more effective, the faster they were imple- world. What we can learn from this global trag- much of these damaging impacts can still be and Prognos (2018): Climate
Paths for Germany, on behalf
mented, the better they were coordinated with edy is how resolute, profound, and swift global prevented and the potential economic and social of of the Association of
the German Industry (BDI),
neighboring countries, and the more they took action is possible, if the understanding of a com- results of taking rapid action now are positive. online available under http://
the globalized exchange of goods, services, and mon threat is communicated in a science-based This is one of the most important recent com- image-src.bcg.com/Images/
Climate-paths-for-Germa-
people into account following the precautionary and responsible manner. monalities of German and Japanese energy ny-english_tcm9-183770.pdf
principle. Political and economic willingness to policy. By presenting the “Long Term Strategy
4 https://www.iea.org/
act, the ability to coordinate, and social soli- We can therefore learn some fundamental under the Paris Agreement”2 Minister Abe said: Prof. Dr. Peter Hennicke, commentaries/put-clean-
energy-at-the-heart-of-stim-
darity in and between countries were practiced lessons for joint action on the energy transition “Responding to climate change is no longer a Prof. Masakazu Toyoda,
ulus-plans-to-counter-the-
– despite conflicting self-interests – to an extent and climate protection: Many of the dramatic cost for the economy, but a growth strategy for Co-Chairs of the GJETC, June 2020 coronavirus-crisis
6 7
1 Introduction
REPORT 2020 REPORT 2020
1
Introduction
The German-Japanese Energy Transition Council
(GJETC) was established in 2016 by experts from
research institutions, energy policy think tanks, and
practitioners in Germany and Japan.
The objectives and main activities of the Council From October 2018 to March 2020, the
and the supporting secretariats are to identify GJETC worked on and debated six topics:
and analyze current and future issues regard-
ing policy frameworks, markets, infrastructure, • Digitalization and the energy
and technological developments in the energy transition (study)
transition, and to hold Council meetings to • Hydrogen society (study) Japanese-German Center
Berlin, February 2019
exchange ideas and propose better policies and • Review of German and Japanese long-term
strategies. In its second project phase (2018- energy scenarios and their evaluation
2020), the GJETC had six members from aca- mechanism (working group) Figure 1: Structure and members of the GJETC 2018-2020
demia on the Japanese side, and eight members • Buildings, energy efficiency, heating/cooling
on the German side, with one Co-Chair from (working group) Japan Germany
each country. • Integration costs of renewable energies
(working group) The German Federal
METI
• Transport and sector coupling Environmental Foundation (DBU)
Ministry of Economy, Financing Stiftung Mercator Foundation
Trade and Industry
(working group) Federal Foreign Office
Chairman: Chairman: Prof. Peter HENNICKE
Prof. Masakazu TOYODA (hennicke.consult)
The outputs and the recommendations of the (IEEJ) Scientific Secretariat:
Management
second phase of the GJETC are summarized in Scientific & Organisational Secretariat: Wuppertal Institute
Institute of Energy Economics Japan Organization & Consulting:
this “GJETC Report 2020”. This material is also (IEEJ) ECOS Consult
published on the website www.gjetc.org. Council Members
Prof. Jun ARIMA Prof. Dr. Yasumasa FUJII Dr. Harry LEHMANN Prof. Dr. Andreas LÖSCHEL
(University of Tokyo) (University of Tokyo) (German Federal (University of
Environment Agency) Muenster)
Prof. Dr. Toshiharu IKAGA Prof. Dr. Koji NOMURA
(Keio University) (Keio Economic Observatory) Dr. Felix C. MATTHES Manfred RAUSCHEN
(Oeko-Institute) (Eco-Center NRW)
Junichi OGASAWARA Prof. Kazuhiko TAKEUCHI
(Institute of Energy (Institute of Global Dr. Carsten ROLLE Franzjosef SCHAFHAUSEN
Economics, Japan) Environmental Strategies) (Fed. of German Industries, BDI) (frm. BMU)
Prof. Dr. Miranda SCHREURS Dr. Stefan THOMAS
(TU Munich) (Wuppertal Institute)
10 11
2
Policy recommendations
by the GJETC
REPORT 2020 REPORT 2020
2
Policy recommendations
by the GJETC
Since the first report by the GJETC was published in 2018,
the IPCC’s special report on 1.5 °C and the rise in worldwide
movements by young people (e.g. ‘Fridays for Future’) as
well as scientists and business (e.g. World Economic Forum
Davos 2020) have provided new urgency and momentum
for action and policy to mitigate climate change.
At the same time, the political narrative has We consider the key recommendations and this century for Japan. It is important to imple-
changed to the economic opportunities of other results presented in the GJETC 2018 Re- ment policies with new innovative thinking such (2) Putting energy efficiency first
climate mitigation strategies and, e.g. in the EU, port still timely and appropriate. In light of the as carbon recycling and energy efficient sector
towards a strategy to steer the economy toward new developments mentioned above and the integration. Furthermore, the level of commit- Energy efficiency continues to be the largest,
more sustainable development by concluding an research and debate we have conducted over ment to targets/goals (e.g. making them legally fastest, and cheapest contributor to a sus-
ambitious European Green Deal.5 the last two years, we wish to add the following binding as is the case with climate targets in the tainable energy system and climate change
In Japan, the key message of its Long Term key recommendations. EU and Germany) and government account- mitigation, and harnessing it should be given
Strategy as Growth Strategy based on the ability for how reliable targets/goals are and utmost priority. This has been demonstrated by
5 https://eur-lex.europa.eu
/resource.html?uri=cellar:b8 Paris Agreement (June 2019) is a virtuous cycle whether or not they are achieved should be research. Many scenarios by the IEA and the
28d165-1c22-11ea-8c1f-01 of environment and growth.6 The underlying (1) Improving energy and increased to secure investment stability, enable installation of a global high-level commission for
aa75ed71a1.0002.02/DOC_
1&format=PDF technological trends are the huge potential still climate targets and policies long-term infrastructure decisions and targeted urgent action on energy efficiency reiterate the
6 Government of Japan
offered by cost-effective energy efficiency in all innovation policies as well as to avoid fossil fuel importance of efficiency improvements.7
(2019): The Long-term sectors and the continued improvement of the Policymakers in both Germany and Japan lock-in effects. In light of new technical and
Strategy under the Paris 7 The Japanese Co-
Agreement. The strategy also cost effectiveness of renewable energies and should reexamine their 2030 and 2050 energy social developments, it is possible to increase However, there are multiple barriers to energy Chair of the GJETC, Prof.
points out that “It could well other relevant technologies (e.g. batteries, elec- and climate targets/goals in order to achieve targets and goals towards a faster reduction of efficiency, which require a policy mix that in- Toyoda, is a member of
be said that climate change the Commission; see
mitigation measures are no trolysis, fuel cells, materials, ICT) and concepts nationwide GHG neutrality, no later than 2050 GHG emissions, especially in the many areas cludes carbon pricing/energy taxation, infor- https://www.iea.org/news/
longer a cost, but a source iea-unveils-global-high-lev-
(e.g. circular economy) needed for the energy for Germany – which is now Germany´s target and sectors that provide economic opportunities mation, direct financial incentives, standards,
of competitiveness among el-commission-for-urgent-ac-
companies“. transition. – and as early as possible in the second half of and high social co-benefits. regulation, professional training, and research tion-on-energy-efficiency
14 15
REPORT 2020 REPORT 2020
the dynamics of market introduction, especially sustainability for H2 supplies in order to advance
wind power, have slowed down and must be and take points (1) to (4) above into account.
accelerated again to reach the 2030 target. These joint efforts should also aim to safeguard
The current share of electricity from renewable investment security for overseas investments
energy sources in Japan is about 18% (2018). in green or blue hydrogen and safeguard a com-
The government has decided to increase this petitive H2 market, especially in the ramp-up
share to 22-24% by 2030. How this share can phase.
be increased beyond 2030 and how the relative-
ly high costs of electricity from PV and wind in In particular, the GJETC recommends exploring
Japan can be decreased should be reconsidered technical, safety, and environmental/sustainability
taking weather and/or topographical conditions standards and certification for green and blue
into account. Appropriate policies may include hydrogen as soon as possible to define ‚clean‘
advanced FIT (feed-in tariff) and auctioning hydrogen in a transparent and comparable way.
11 A GHG emissions
schemes that ensure accelerated expansion of This includes, reduction of least 50%
electricity generation from renewable energies compared to natural gas
– the fossil fuel with the
at minimized cost and carbon pricing, as well as [i] as a first step, exploring a data transpar- lowest GHG emissions – in a
enabling or supporting power purchasing agree- ency initiative for embedded GHG emissions ‚well-to-tank‘ analysis would
be desirable as a credible
ments, peer-to-peer electricity trading, renew- for internationally traded hydrogen. Such contribution by clean
able energy cooperatives, and municipal utilities data disclosure could encourage interna- hydrogen to climate change
mitigation, in order to
(Stadtwerke). Moreover, both countries should tional hydrogen trade with a lower GHG enhance its acceptance by
the public. Analysis in the
optimize grid integration, flexibility, and sector footprint. GJETC‘s study on hydrogen
integration technologies, including batteries, suggests that such a 50%
reduction, which would
and their mix, as well as energy efficiency, in [ii] in addition to this, exploring whether require specific well-to-tank
order to minimize specific and overall power the environmental standards and potential emissions of below approx.
33 gCO2eq / MJH2, could be
and the development and demonstration of to secure the process and steer responsibility system costs with growing shares of variable certification should include an appropri- achievable using blue hydro-
gen in the cases analyzed.
advanced energy efficiency solutions including for reaching the agreed energy conservation renewable energy. ate maximum universal threshold level of
This may allow a maximum
digitalization. targets. Therefore, this report confirms the specific GHG emissions for internationally universal threshold level
of specific GHG emissions
recommendations of the GJETC 2018 report8: traded hydrogen until the border gate.11 The for internationally traded
8 http://www.gjetc. Apparently, the policy mix in both countries “For example, if applicable, a country might (5) Developing a “hydrogen society”10 certification should provide incentives to go hydrogen until the border
org/wp-content/up- gate of 30 gCO2eq / MJH2,
loads/2018/04/GJETC-Re- must be further developed to reap all the consider establishing a strong National Energy below this level. for example, allowing for
port-2018.pdf approx. 3 gCO2eq / MJH2
benefits of energy efficiency and energy Efficiency Agency and Energy Savings Fund that Germany and Japan should work together
for national hydrogen
9 https://www. conservation. is integrated into the institutional setting and and with other interested parties to Further sustainability criteria e.g. for water and distribution from border
bdew.de/media/docu- gate to tank. While this level
ments/20200211_BRD_
policy-making process, with a clear mandate for soil, as well as social aspects, should be exam- of 30 gCO2eq / MJH2 could
Stromerzeugung1991-2019. such policy and process responsibility to achieve (a) bring down costs and improve technologies ined and included in the disclosure scheme and be used to set a minimum
pdf GHG reduction standard or
(3) Improving the governance of energy saving targets.” regarding (1) renewable power generation (for a potential certification scheme. a maximum threshold level
10 We use the metaphor energy efficiency policies so-called green hydrogen), (2) electrolysis (for for specific GHG emissions
“hydrogen society”, which is for internationally traded hy-
quite popular in Japan, but green hydrogen), (3) CO2 capture, transport, (c) take the initiative to build up an international drogen until the border gate,
less so in Germany because it would not be sufficient for
Against the background of what are still large (4) Advancing renewable energies, and storage (for so-called blue hydrogen pro- production and supply infrastructure for clean
– according to representa- hydrogen to be imported to
tive scenarios – hydrogen implementation gaps regarding energy efficiency system integration, and sector duced from fossil fuels), (4) long-distance hydro- hydrogen with a number of like-minded supplier the EU. It should be noted
will contribute an important, that the recently revised
but not a dominant share and energy conservation improvements, there is coupling gen transport, (5) transformation of natural gas and importer countries meeting the certification EU Directive on renewable
of total energy production urgent need for strong governance of transfor- distribution infrastructures into hydrogen-ready criteria together. energies requires a 70%
in both countries by 2050 reduction in GHG emissions
(see below). Hydrogen will, mative energy efficiency policies, including the In 2019, Germany reached a 40% share of re- infrastructures and (6) hydrogen-ready applica- in a well-to-tank analysis
however, play a key role in institutional arrangements for monitoring and newables in total production and 42% in gross tion technologies. (d) cooperate in building the infrastructure for compared to natural gas as
the climate neutrality of the benchmark. This may go
industrial sectors with high evaluation. The high complexity of energy end- electricity consumption9, and the government the distribution and use of clean hydrogen in further than is feasible with
shares of process emissions blue hydrogen and its trans-
(e.g. iron & steel or chemical
use efficiency technologies and energy service decided on a target of 65% renewable energy (b) explore an international governance scheme Germany and Japan to advance points (e) and
portation to many potential
industries). markets in particular raises the question of how in gross electricity consumption by 2030. But that safeguards GHG standards and broader (f) above. importer countries.
16 17
REPORT 2020 REPORT 2020
transport from road and air to ships, trains, local target achievement are increasingly important
(6) Harnessing sustainable digitalization public transport, bicycles, and walking, and 3) elements of climate and energy policies. The (10) Enabling system integration of high
for the energy transition12 improving the energy efficiency and emissions exchange of experiences on these as well as on shares of variable renewable energies
balance of vehicles. For the other half of the policy design and the government institutions
Digital technologies, solutions, and business way, an energy transition to electric vehicles, and capacities needed to sustain a polycentric The GJETC therefore recommends (1) further
models can be an important enabler for the hydrogen, and clean fuels is needed. Germany governance capable of achieving the targets analysis and simulation to better understand the
energy transition, provided their own energy and Japan should create the policy framework could be an interesting field of cooperation too. opportunities of different technologies and their
and resource use is considered and minimized. needed to achieve this double transition and For example, the German Climate Protection combination, as well as the differences in costs
The GJETC recommends analyzing the balance work together to further develop the necessary Act (12/18/2019) established legally binding between Germany and Japan (cf. chapter 4.6),
of opportunities and possible counterproductive technologies and solutions. sector targets for 2030 and the corresponding taking experiences in other countries on board,
increases in energy and resource consumption monitoring and enforcement mechanisms. such as US federal states or Denmark; (2) imple-
by the ICT infrastructure and devices. The GJETC If continuing gaps between targets and im- menting joint German-Japanese demonstration
sees potential for German-Japanese coopera- (8) Making buildings GHG neutral plementation occur, strengthening of policies and pilot projects to test advanced technologies
tion, e.g., in 1) energy management systems particularly in sectors that show implementation and business models for flexibility, similar to the
for buildings, factories, city districts, and whole In addition to the transport sector, decarboniz- gaps will be appropriate, but a flexible adapta- SINTEG program in Germany, for example; and
cities; 2) integrating variable renewable energies ing the building sector, especially by retrofitting tion of ambition levels of sectoral targets while (3) developing a priority list for market readiness
and other low-carbon generation technologies the existing buildings stock, is still an unsolved respecting the overall national target might be and implementation of different flexibility op-
as well as flexibility options in the electricity problem for both countries. The task for energy justified too. In this respect, the new and legally tions, with the timing of implementation related
markets and grids by enabling shorter trading and building policy is 1) to reduce the energy binding sector-specific enforcement mechanism13 to the share of VRE in the system. Obviously,
intervals, peer-to-peer electricity trading, and needs of both existing and new buildings to a of the German Climate Protection Act will pro- such a priority list would also be adapted to the
other solutions such as “connect and manage”; minimum through efficient design, thermal in- vide interesting experiences. situation in each country, Germany and Japan.
3) digital solutions for optimizing the use of sulation, shading, and heat/cold recovery venti-
technologies that can provide both flexibili- lation, so that 2) the remaining energy need can
ty and sector coupling in order to maximize be covered more easily by renewable energies
the use of variable renewable energies in the and making it possible for buildings to even be-
system; this includes the system integration of come net energy producers over the year (“Plus
13 The law has defined
stationary batteries and battery electric vehicles, energy houses/buildings”). Connecting German annual sectoral maximal
hydrogen-fueled CHP plants, heat pumps and knowledge of and technology for building shell emissions per sector for
each year until 2030. As
heat storage, as well as other technologies. energy efficiency and Japanese knowledge of for monitoring, the Federal
and technology for BEMS/HEMS and Smart Environmental Agency will
compile sectoral emissions
Cities could provide better energy performance data for a calendar year until
15 March of the following
(7) Achieving sustainable mobility and in both countries, and opportunities for imple- year and send them to the
the energy transition in the transport mentation in other countries too. expert council on climate
issues (§5 (1) of the law).
sector The council assesses the
data. If the sectoral emis-
sions according to the data
Decarbonizing the transport sector is still a (9) Establishing appropriate monitoring are higher than the allowed
and governance schemes sectoral emissions for the
major challenge for both countries, especially
year, the ministry in charge
12 The GJETC of course Germany. The GJETC was only able to take a of the sector has to prepare
recognizes the profound an urgency program within 3
impacts of digitalization, preliminary look at contributing to solutions e.g. Both countries still face significant gaps that months from the assessment
which go far beyond the
energy system. However,
in light of several demonstration projects. Ac- need to be closed to be fully compliant with by the expert council; the
urgency program has to en-
in view of the significant cording to a hearing with experts and a broad even existing CO2 reduction targets by 2030 sure that the annual targets
implications for the energy for the sector will be met for
transition (e.g. super-effi- review of existing literature, it can be stated that and beyond. Against this background, com-
all future years until 2030
cient production systems, about half of the way to a more sustainable prehensive, objective and scientific assessment (§8 (1) of the law).
changes in lifestyle, all of Available at:
which can reduce energy and decarbonized transportation system can be mechanisms for monitoring, evaluation, target https://www.bmu.de/
and material use), the focus
reached using three key mobility policies, i.e., revision and further development of target fileadmin/Daten_BMU/
here is on the energy-related Download_PDF/Gesetze/
issues of digitalization. 1) avoiding unnecessary transport, 2) shifting structures as well as the policies which enable ksg_final_en_bf.pdf
18 193
Studies and Working
Group results and specific
recommendationsREPORT 2020 REPORT 2020
ers, which has created the market for the VPP
Key findings
3 aggregators and a basis for the VPP business
model in the country. The VPPs now also include
A) Virtual Power Plants gas-fired CHP plants, demand response, and
Studies and Working Group results VPPs can serve various purposes in liberalized
power markets with a growing share of renew-
other resources such as gensets. In addition to
this, in Germany, transmission system oper-
and specific recommendations able energy and other distributed energy re-
sources. 1) VPP can pool small to medium-sized
ators (TSOs) are legally required to purchase
control reserve though the market so that VPP
renewable energy sources (RES) generators aggregators can offer their aggregated distrib-
Based on the in-depth studies on digitalization and hydrogen and offer to sell their power on the wholesale uted energy resources (DERs) to this market. In
and the output papers of the four GJETC working groups, as well market (day-ahead market). In Germany, this is this context, biomass/biogas power plants are
as the joint outreach events, the following chapter presents the a service to fulfil a legal requirement for medi- considered to be indispensable resources for the
key results and specific recommendations. um to large RES generators. 2) Particularly for large VPP such as Next Kraftwerke, since they
biomass and hydro power plants, their flexibility are as flexible as gas-fired power plants. The
allows the VPP pool to both maximize revenues gradual expiry of the FIT entitlement in Japan
by selling when power is more expensive on after 2019, which requires RES producers to sell
the day-ahead market, and to operate in the the power on the market by any means, would
3.1 control reserve power market (required by the bring about a favorable situation for VPP as oc-
energy market legislation in Germany since curred in Germany, although the majority of RES
Digitalization and around 2010 and currently under development will continue to qualify for the FIT entitlement
the energy transition in Japan), as well as in the intraday market for over the next decade.
short-term trade that supports balancing energy
supply and demand for the individual balancing The organization of the electricity supply system
groups. 3) Therefore, in addition to RES genera- is also an important factor for the development
The GJETC Study on Digitalization tors, VPP can also include gas-fired CHP, battery of VPP. An unbundling of the traditional, verti-
storage, emergency gensets, and demand cally integrated power supply system establishes
Digitalization in the energy system is progressing ‚Digitalization and the energy transition’, with response. a fundamentally positive environment for mar-
rapidly with the spread of artificial intelligence financial support from DBU and METI, as part of ket entry by new suppliers as seen in Germany.
(AI), such as software tools to optimize demand the GJETC’s work in its second two-year phase The case studies analyzed in Germany, Japan, Similarly, an electricity market system can also
and weather forecasts, and internet of things (IoT) from 2018 to 2020. The study was performed in and the USA, and their comparison have shown have an impact on VPP development. The bal-
technologies, including smart meters and secure two parts, one in 2018/19 (Japanese FY2018), that the VPP business model will largely depend ancing group model adopted in Germany and 14 Two aspects should,
however, be mentioned:
data communication systems such as blockchain. and one in 2019/20 (Japanese FY2019). on the regulatory framework for renewable Japan can be highly favorable for VPP in com- 1.) VPP could have
As a result of the development, virtual power energy resources (RES) and electricity supply as parison to the power pool model adopted in a positive impact on
minimizing infrastructure
plants (VPP) are being put into operation in some The first part of the study (Ninomiya et al. 2019) well as the electricity market system. These are the USA14. These findings imply that a positive needs; however, whether
countries, and peer-to-peer (P2P) energy trading focused on VPP and, to a lesser extent, on the use the main factors that have significant impacts environment for VPP can be expected in Japan, VPPs would also increase
the system costs due to their
utilizing blockchain technology is starting to be of blockchain technologies in the energy sector. on the status and purpose of the VPP examined particularly after 2020 as the unbundling of the focus on micro-optimization
demonstrated, for example. These new business The second part of the study (Ninomiya et al. in the case studies. vertically integrated supply system is scheduled is still a source of significant
controversy.
models, as well as power purchasing agreements 2020) focused primarily on P2P energy trading for that year. 2.) On the one hand, cen-
tralized liberalization models
(PPAs), may advance both the expansion of elec- and also analyzed PPAs. An existing, generous RES support scheme such (as are found in the USA,
tricity generation using renewable energies, and as a fixed FIT or net metering for RES clearly pre- Such positive prospects for VPP in Japan would for example) certainly have
some problems with decen-
their integration into power markets and grids. This chapter of the GJETC 2020 report summa- vents RES producers from connecting to a VPP, even be enhanced by the fact that the share of tralized trading activities,
rizes the results of the study and the comments and this is currently being observed in Japan VRE will increase, as the Japanese government but, on the other hand, they
offer options for dealing
This was the motivation for the IEEJ and the of the GJETC’s Facilitating Working Group on and the US. Germany’s experience shows that has set a clear policy target for renewables to with locational price signals,
which is a blind spot of the
Wuppertal Institute to perform a study on digitalization and the energy transition. mandatory direct marketing of RES required by be major power resources by 2030 and beyond.
decentralized balancing
the law has a strong impact on the RES produc- The higher share of VRE will obviously require an group model.
22 23REPORT 2020 REPORT 2020
er-to-fuel; improving consideration of regional tion requirements than a traditional base load
or local network constraints in the scheduling of PPA, e.g. to forecast market prices, but were a
DERs for the day-ahead and intraday markets as minor focus of the study. The questions concern
well as in their use as control reserve; prequalifi- purposes/objectives of P2P trading and PPAs,
cation of wind and PV plants for control reserve; models of P2P trading and PPAs, preconditions
and in general, further improving the market con- for the implementation of the models, the
ditions for DERs and VPPs. Nevertheless, at this current status of development in Germany and
stage, it can be said that the regulatory frame- Japan, incentives/opportunities and barriers/
work for RES, the unbundling of the electricity threats for market actors, potential positive/neg-
supply system, and the existence of an electricity ative impacts for markets and energy systems,
market system are the main factors in explaining and opportunities/threats for market actors and
differences between VPP models in the three consumers/prosumers, in order to make recom-
countries examined in this comparative study. mendations on P2P trading and PPAs as well as
policies needed for their successful implemen-
Regarding the use of blockchain technologies, tation.
the main conclusion of the analysis is that what
their potential main use for the energy system a) Purposes/objectives of P2P
in the near or further future is still unclear. Will trading and PPAs
they be used to simplify transactions between
actors already active in today’s energy markets The purposes/objectives of P2P trading
increase in grid flexibility, suggesting that VPPs Germany and Japan vs. the power pool model and reduce the cost of these? Or will they in- have been identified as;
would be one type of favorable flexible resource in a number of states in the USA). However, de- creasingly be used for P2P energy trading?
for the grid in the future. The capacities of each tails of the minimum size of bids or conditions (1) enabling the continued economic operation
individual RES developed in Japan are currently for prequalification to a market, for example, B) P2P energy trading and PPAs of the post-FIT renewable plants, for which their
much smaller than in Germany and the USA, may be decisive for the prospects of VPPs or The second year study examined a series of FIT support period has ended; their numbers
reflecting less availability of suitable land for types of DERs to participate in the markets. questions on P2P energy trading and PPAs. For and capacity will be increasing, particularly for
ground mounted PV/RES production in areas with Likewise, IT systems employed in VPP also seem this analysis, the authors of the study defined wind and solar plants from 2021 in Germany,
high population densities. Thus, an aggregation to be an insignificant factor in explaining the P2P energy trading as “a contractual model and a large number of residential roof-top solar
of the small DERs via a VPP aggregator rather diversity between them. In fact, in Germany that will enable short-term electricity exchange plants as early as 2019 in Japan;
than an individual DER could create more valu- there are several providers of software systems on a regional or national scale between multi-
15 Under the German
able resources for grid flexibility in Japan, partic- for VPP operators. ple peers such as ‘prosumers’ or/and small to (2) financing new renewable power plants in a Renewable Energy Law, grid
ularly if the share of VRE increases significantly in medium power generators and/or electricity post-FIT era without payments of a FIT or FIP/ access and payments for
new medium to large renew-
the future. The share of VRE also seems to be an However, it should be noted that the outcomes appliances located at the end of distribution MP15 type, as it may be useful and possible able energy generators are
granted only by succeeding
important element in providing a business oppor- of the case studies explained above may change networks, i.e. distributed energy resources”. in the long run to have a market design that in an auction. The generators
tunity for VPP to participate in flexibly matching considerably in the future. This is because full Meanwhile, the following definition has been integrates renewable assets without a FIT or FIP/ will receive the Feed-in Price
(FIP) they bid or the whole-
supply to demand, as seen in Germany. commercialization of VPP has only been seen in used for PPAs: “A PPA is a medium-to-long-term MP scheme; sale market price at the time
Germany so far, implying that there is still sub- electricity supply agreement concluded between of feed-in, whatever is high-
er. If the wholesale market
Compared to the factors explained above, in- stantial room for further development of VPP a seller (plant operator) and a buyer, e.g. an (3) meeting corporate green electricity purchase price for the same type of
cluding the existence of an unbundled electricity in other countries that may have very different energy supplier or final electricity consumers, or decarbonization goals; generator (e.g. Solar PV, on-
shore wind), averaged over
market, the structure of the electricity market consequences. For instance, at a mature stage, such as large industrial consumers, data centres, the month, is lower than
the FIP, the generator will
(regulation, rules, procedures and requirements different market structures and IT systems could and large buildings”. Both were chosen since (4) matching supply and demand of the partic- receive the Market Premium
for participation, excluding incentive mecha- make a substantial distinction between VPP they may be promising market models for inte- ipating generators and customers in total and (MP) covering the difference
to the accepted FIP of the
nisms for RES) does not seem to be one of the models. There is further need for VPP develop- grating renewable energies into the electricity in regional decentralized markets especially as generator. Japan currently
main causes of the difference between the VPP ment in Germany. This includes making better market. P2P trading is clearly more innovative in long as regional and real time market prices for considers to newly introduce
the FIP/MP scheme similar
models, as the markets currently developed in use of demand response, batteries – including its business models and use of digitalization, so smaller customers have not been developed yet; to German in place of the
existing FIT scheme for large
the three countries are relatively similar (with in electric vehicles, and other flexibility options it was the main focus. PPAs for variable renew-
scale solar PV and onshore/
the exception of the balancing group model in such as power-to-gas, power-to-heat, or pow- able energies will also involve greater digitaliza- (5) grid stabilization via targeted P2P trading. offsore wind.
24 25REPORT 2020 REPORT 2020
Similarly, the purpose/objectives that an amount of electricity traded under a P2P Table 1: P2P trading models
of PPAs are: trading contract can be far smaller than in PPAs.
Centralized or Sub-category German Japanese model name
Decentralized model name
(1) the promotion of newly-built renewable b) Models for P2P trading and PPAs
Controlled P2P Wholesale market model Model G1 Model
power plants over the longer period in a post- A number of models for P2P trading have network model J4: Existing electricity retailer acts as P2P platformer
J5: P2P platformer is independent of the
FIT era, providing security of price and green already been both proposed in theory and tested electricity retailer
electricity supply for both generator and buyer; in practice in Germany and Japan. In this paper, J6: P2P transaction b/w factories/buildings owned
by the same company
they are re-categorized according to the central- J7: P2P transaction b/w prosumers/consumers
(2) supporting continuous operation of “FIT-ex- ity of whole system of operation, focusing on forming a partnership
pired” renewable energy plants without explicit who has operational responsibility for the net- Regional/local electricity Model G2
procurement model
financial support from the public sector or work, between a centralized model (controlled
P2P trade serving grid Model G3
energy consumers; P2P network model, with an energy supplier or stabilization model
other central operator controlling the P2P trad- Decentralized on-grid trading Model G4
autonomous P2P
(3) meeting corporate green electricity purchase ing and supporting it, for example by providing network model
local microgrid trading (off-grid) Model G5 Model
J1: P2P transaction within a limited
or decarbonization goals. balancing services and contracts for network building/flat/apartment
use) and a decentralized model (decentralized J2: P2P transaction using charged electricity in EV
J3: P2P transaction via private line within a
autonomous P2P network model, where each limited community
However, several distinct differences between producer or prosumer acts as its own balancing
P2P trading and PPAs are highlighted, which are group). The controlled P2P network model is fur- Note: model numbers were defined by the study team from the IEEJ and the Wuppertal Institute
the capacity size of power plants (typically those ther divided into three sub-category models with
in PPAs are much larger than in P2P), the type of respect to the object of each model, which are
consumer (the consumer/buyer side of PPAs is the wholesale market model, the regional/local The models discussed in Germany fit all five advanced position for nationwide implementa-
likely to be a large energy consuming company, electricity procurement model and the P2P trade categories (called Model G1 to G5 for each tion of P2P trading than Germany. In Germany,
which is typically larger than P2P customers, or serving grid stabilization model. In the same category), while the models proposed in Japan P2P trading models are now working with stan-
a green electricity supplier, whereas it is often way, the decentralized autonomous P2P network are divided into two models (Model J1-3 in the dard load profiles instead of loads measured and
smaller consumers for P2P trading), and the du- model is further divided into two sub-category off-grid model within the decentralized auton- transferred by smart meters.
ration of contracts (duration of PPAs is normally models, namely on-grid trading and off-grid omous P2P network model and Model J4-J7 in
much longer, for instance between 3 and 20 trading (local physical microgrid model). As a the wholesale market model within the con- The second key precondition is a digital system
years, which is longer than P2P trading contracts, result, in total, five categories of P2P trading trolled P2P network model). for data transmission and handling with an eco-
which usually have the same duration as normal models are identified for Germany and Japan, nomic transaction system, which often employs
supply contracts). All of these differences imply which are summarized in the following table.16 PPAs can simply be distinguished as on-site and blockchain technology, though other systems
on-grid PPAs. using central database and data processing tech-
nologies and software would be feasible too.
c) Preconditions of P2P trading and PPAs
With regard to the preconditions of P2P trading, d) Current status of development of
a large-scale deployment of smart meters, also P2P trading and PPAs
known as ‘intelligent metering systems’ in The current status of development of P2P trad-
Germany, is identified as the primary precondi- ing in Germany is quite promising. There may
tion for implementing P2P trading with its full currently be a total of more than 15 schemes.
potential to support flexible markets and grids17. Most of them are on-grid P2P trading controlled 17 There may still be a need
The current status of and plan for smart meter by a utility company or a new, specialized plat- to add specific devices to
the smart meters in order to
roll-out in Germany and Japan highlights a clear form provider (models G1 and G2). While most execute the trading and re-
mote control functions, and
difference between the two countries, whereby of these are pilot projects, full commercial prod- potentially other functions
the installation of smart meters is expected to be ucts for P2P trading of renewable electricity are that are necessary but not
16 The GJETC study report included in the smart meters
on digitalization includes completed in Japan by 2024 and in Germany by available from at least two providers. In Japan, themselves. But smart me-
graphs presenting the mod- 2032. This implies that Japan is, at least on the only a few projects have been developed on ters are required as the basis
els. They are not repeated and for the full flexibility
here for lack of space. basis of technological infrastructure, in a more a pilot basis, coming under models J3 and J4. potential.
26 27REPORT 2020 REPORT 2020
None of them are commercialized yet or have opportunities and threats. This is because it
publicly released tangible results. The develop- has been found that on-grid P2P trading per
ment of P2P trading is still at a very early stage, se is unlikely to change anything in regard to
at least in Japan. the physical flows of electricity compared to
the traditional electricity market model unless
Regarding PPAs, the examples in Germany P2P trading either explicitly includes or induces
indicate that PPAs have been developed in the additional demand/supply changes through
country, though not as much as in the Nether- demand-side management (DSM), flexible gen-
lands and the UK, for example. This is expected eration, system-driven use of batteries/ battery
to increase, especially for FIT-expired plants, but electric vehicles (BEV), or they are otherwise in-
also for new PV plants that wish to avoid the duced by grid operators or government policies.
cumbersome auctioning process and the risk of Therefore, it would not provide any additional
not winning the bid. In Japan, the development benefits per se for the alleviation of grid bottle-
of PPAs is behind Germany but likely to grow in necks and grid integration of renewable energy
the near future. without additional measures to induce changes
in demand/supply. Therefore, the impact on TSO
e) Incentives for and barriers to P2P and DSO is depending on whether or not addi-
trading and PPAs for market actors tional demand/supply change can be induced
In terms of incentives for and barriers to P2P trad- by supplemental measures associated with P2P
ing for market actors, the most heavily impacted trading.
area would be the business opportunities of tradi-
tional electricity retailers. There is a significant risk The incentives for and barriers to on-grid PPAs However, as stated above, neither on-grid P2P
of losing their business margin as their customers are quite similar, but their impacts are far less trading nor on-grid PPA models will contribute Conclusions and policy
move to P2P trading. Wholesale trade companies, significant for all of the market actors, implying per se to market or grid stabilization by support- recommendations
including VPP operators, would also be affect- that PPAs are generally quite compatible even in ing the use of flexibility options in their opera-
ed since the direct P2P trading will reduce their the existing market. tion. Incentives for generators and consumers a) Conclusions and policy
business opportunities. Therefore, there will be a in this direction will need to be added as in any recommendations regarding VPPs
strong incentive for traditional electricity retailers On-site PPAs and off-grid P2P trading are par- other market and supply model. To the extent VPPs are a useful model for integrating renew-
and wholesale trade companies to become P2P ticularly attractive for the parties involved, since that P2P trading accelerates the installation of able energies and other distributed energy
platformers themselves in order to avoid losing they will (partly) avoid retail electricity prices (incl. smart meters in Germany, it will also enhance resources (DERs), such as gas-fired CHP, battery
their business margin; this has actually been ob- grid fees, taxes, and the FIT surcharge in Japan, the options for supporting flexibility options storage, and demand response, into the liberal-
served in Germany and Japan. In contrast, small but not including the FIT surcharge for PV plants through its smart contracts and blockchain ized energy markets organized according to the
to medium renewable generators, prosumers and larger than 10 kW in Germany) for the parties. transaction infrastructure. If off-grid P2P trading balancing group model, which are established
consumers would have substantial positive oppor- and on-site PPAs involve storage and an energy both in Germany and Japan. VPPs can mar-
tunities to enter P2P trading. They can avoid the f) Impacts of P2P trading and PPAs for management system between P2P trading ket power from these DERs in the day-ahead,
margin of traditional electricity supply and share markets and the energy system overall participants or within the PPA site, this is likely intraday, and balancing power markets flexibly
these savings between them, if the costs and the The existing P2P trading business models and to lead to some grid stabilization effects at the to optimize revenues by balancing high and low
risks associated with implementing P2P trading PPA contracts in both countries indicate that local (at least substation) level. price periods. Policy should (continue to) legally
are effectively addressed. Risks include privacy and both could contribute to the continued use of allow and enable the operation of VPPs and
data security as well as other potential risks posed post-FIT renewable energies and new invest- To the extent that customers in on-site PPAs and support this by rolling out smart meters and safe
by blockchain technologies. In addition, P2P plat- ments in renewable energy plants without a off-grid P2P trading save grid fees, taxes, and communication gateways, which can be used by
formers and P2P platform technology providers FIT payment. This will increase the amount of FIT surcharges, this would cause a distributional VPP operators to add their control devices. Flexi-
would see enormous business opportunities in renewable energy in the system and therefore effect, since the other connected consumers ble power prices, including time-dependent grid
the field of P2P trading. benefit society. If both models reduce the mar- would have to pay a correspondingly higher tariffs, would improve the economic conditions
gins of traditional electricity supply, as some P2P share of total grid costs and the FIT surcharge, for integrating further flexibility options, such as
The impacts on TSO and distribution system trading schemes in Germany seem to indicate, and the community of taxpayers would lose a battery electric vehicles or heat pumps.
operators (DSO) would be a mixture of positive this will benefit society too. certain amount.
28 29REPORT 2020 REPORT 2020
on whether there are other options 1) to secure Furthermore, in order to support the use of
the operation of post-FIT plants, such as a kind flexibility potentials of RES-E generators and
of “macro-PPA” or “2nd FIT period” regulation18, particularly of demand and storage, policy should
and 2) to stimulate the ambitious construction of accelerate and support the roll-out of smart
new RES-E plants (e.g. a 65% share for Germany meters, especially in Germany which is lagging
in 2030), e.g. via a sufficient capacity awarded behind, and other required IT, as well as their
through auctions for FIP/MP for the latter. These use to stimulate flexibility options. This will be
are ultimately political decisions on the preferred particularly useful for participants in existing or
policy framework for the expansion of renewable new P2P trading, as the blockchain transaction
energy sources: infrastructure built up for P2P trading also makes
it easier to integrate the transactions for flexibili-
• Should the target be to end fixed FIT schemes ty. In addition, we see a need to support invest-
and auctions for FIP/MP for new renewable ments in creating flexibility options that can be
power plants, and to support market solutions controlled using the smart meters.
such as P2P trading and PPAs for certified green
electricity instead? The required specific policies to enable the use
of P2P trading models J4 and J5 in Japan have
• Or is it wiser to secure politically defined paths been identified, including those related to the
for expansion of the various types of renewable existing measurement law, privacy risk, grid fees,
energies through auctions for FIP/MP and con- imbalance responsibility of P2P platformers and
tinued fixed FIT schemes for prosumer-scale to the existing regulation on partial electricity sup-
medium-sized PV, including support for post-FIT ply to small consumers by multiple suppliers.
generators?
For Germany, as the growing number of pilot
This will depend on such general political de- or fully commercial schemes shows, on-grid P2P
b) Conclusions on useful P2P (Model G5 and Model J1 to J3) within a certain cisions and paradigms, to which extent policy trading is already possible. Policy should promote
trading and PPA models site or building behind the grid connection and will need to and should support the wide-scale coupling them with flexibility options, i.e. by
Insofar as they contribute to the objectives listed metering point. implementation of the useful models previously accelerating smart meter roll-out. Moreover, the
above, P2P trading and PPA models will be useful. identified. Even if a general decision in favor of government could develop standard rules/tem-
Both on-site and on-grid PPA models may also FIT schemes and auctions for FIP/MP is taken, plates for smart contracts that specifically meet
For on-grid P2P trading, we found that, in the be useful for sustaining post-FIT operation of the extent to which P2P trading and PPAs will data and consumer protection requirements.
short run, only those models will be possible PV or wind power plants and to accelerate the be useful in further boosting renewable energy 18 “Macro-PPA” would
in practice, which are offered by an existing expansion of new RES-E capacities. development remains to be seen. For PPAs, we also recommend that policymakers mean that the government
would introduce regulations
electricity supplier operating a P2P trading plat- However, the open questions, potential risks Since a number of open questions and risks continue to legally allow and enable the use of requiring that TSOs or DSOs,
or a public single buyer as
form or a new P2P platform provider that can and distributional effects mentioned above have yet to be clarified or resolved, we recom- PPAs but closely monitor their development and
in Austria, buy the power
either take balancing group responsibility for should be considered when assessing the use- mend that policy allows and enables the use of impacts, as well as potential alternatives. from all post-FIT generators
in their area at a negotiated
the participating generators, prosumers, and fulness of these models. P2P trading models G1 to G3 and J4 and J5, or fixed price and sell it as
consumers or cooperates with a company that but closely monitors their development to learn Please find recommendations on further a certain share of electricity
supplied at the average price
organizes balancing group responsibility (Mod- c) Policy recommendations regarding about their potential and any possible positive or research needs in Chapter 4. achieved in the grid area to
els G1 to G3 in Germany, Model J4 and, if legal P2P trading and PPAs negative impacts. Further support for appropri- all suppliers serving custom-
ers in the area, or averaged
preconditions are created, Model J5 in Japan). The GJETC study found that P2P energy trad- ate P2P trading models may be useful, among across the country. A “2nd
FIT period” regulation would
ing and PPAs can offer promising solutions to other policy options, if monitoring reveals that mean a new but much lower
Self-organized, decentralized autonomous mod- support the expansion of renewable energies in other available options are not sufficiently able to FIT is set or a feed-in price
determined by auctions for
els without the support of an external retailer the electricity system and market. However, the ensure the operation of post-FIT plants and stim- these generators. Note: if
or balancing group responsible are unlikely to question remains as to whether there are better ulate the construction of new RES-E plants, e.g., the price in the “macro-PPA”
model is fixed and the
flourish in on-grid P2P trading (Model G4) with- alternatives. Whether concrete policy support if auctions for FIP/MP for the latter have problems average price is determined
out major changes in legislation and regulation, for the renewable energy P2P trading business in securing the capacity needed to achieve RES-E across the whole country,
this will be the same as a
but might be useful in off-grid P2P trading itself may be needed and wanted will depend expansion targets from new plants. “2nd FIT period” scheme.
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