Research project

Investigator:

Anna Butenko

Abstract:

Distributed/decentralized energy resources (DERs) have grown spectacularly over the last years, both in Europe and in the United States. An important transition the energy market is undergoing is the shift from energy consumers to ‘prosumers’, who produce energy to cover their own energy demand partially or totally. Due to technological innovations, prosumers can not only produce electricity, but also (pro)actively participate in the energy market in the role of trader and supplier. This leads to the possibility of a shared/collaborative economy in the energy sector. Such peer-to-peer energy trading among consumers is also referred to as transactive energy. The benefits of energy prosumers’ participation in the retail and wholesale energy markets include reduced network costs and increased renewable energy generation, consumer empowerment, and energy efficiency. However, the prosumers’ trading on transactive energy platforms could potentially lead to several risks. First, such platforms are data-driven innovations, and as such fall under both energy- and digital-sector regulations. This could be problematic as it may be inconsistent and lead to legal uncertainty. Secondly, transactive energy represents a new business and governance model, which presumes different interactions between actors and different roles and responsibilities, etc., than previously existed on the market. This could lead to so-called ‘regulatory disconnection’, which refers to regulators’ difficulty in keeping pace with innovation that is developing quickly or in unanticipated ways.

On both sides of the Atlantic, the regulatory experts are faced with the same challenging question: How to effectively regulate transactive energy platforms in a manner that would maximize the benefits and minimize the risks? This challenge informs the main research questions of the current project, which aims to clarify the legal regimes applicable to transactive energy platforms in the EU and the US and to develop practical guidelines for regulating these data-enabled innovations in the energy market.