- IOTA’s potential to cater to scalability requirements has made it a preferred choice for P2P energy trading.
- Due to its DLT architecture, IOTA can also cater to the key requirements of immutability, decentralization, and privacy in P2P energy trading.
Due to its lower transaction fee and greater potential for scalability, the IOTA blockchain remains the preferred choice to cater to real-world applications and use cases. One of the major use cases that industries are actively exploring is peer-to-peer (P2P) energy trading.
The International Association for Trusted Blockchain Applications (INATBA) has recently published a new report on the use of distributed ledger technologies (DLT) in peer-to-peer energy trading. Power and energy industries worldwide have been facing major challenges forcing them to rethink the existing power system operations and market structures.
But the recent improvement in IT infrastructure and use of smart meters is steering new business models which can be leveraged to increase the overall performance of the grid. One of the business models that has been actively explored is peer-to-peer (P2P) wherein households can share surplus energy and electricity directly. P2P energy trading offers greater flexibility, better congestion management, and improved accessibility to energy trading.
In the recent report from INATBA, the IOTA blockchain has emerged as the top choice for protocols that can meet the stability required for such a P2P energy-trading infrastructure.
[ICYMI] @INATBA_org published a new report on the use of #DLT in peer-to-peer energy trading. #IOTA ranks among the top protocols due to lower transactions fees and potential for scalability.
Check out the full report here👇https://t.co/GTtzUxV6yI
— IOTA (@iota) January 18, 2023
Addressing Technical Challenges for P2P energy Trading
In their latest report, INATBA has specified some of the technical and regulatory challenges associated with the use of DLT in P2P energy trading. Besides, it also discusses certain trade-offs associated with different aspects such as immutability, decentralization, and privacy which hinder their scalability. Speaking on the matter, Ricardo Simoes, Executive Director of INATBA said:
This trading report has convened critical conversations around immutability, scalability and data privacy that could serve as a bridge between the relevant regulations and the energy industry .
To cater to its mission ahead, INATBA has formed a joined task force along with the International Energy Agency, and the Global Observatory on Peer-to-Peer, Community Self-Consumption, and Transactive Energy Models (GO-P2P). Alexandra Schneiders, Task Leader of GO-P2P said:
We hope that our findings will start much-needed conversations on the scalability of peer-to-peer energy models using DLTs, and the involvement of smaller actors such as community energy groups in standardisation efforts.
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IOTA and P2P Energy Trading
This is also not the first time that the IOTA blockchain has emerged as a proven choice for P2P energy trading. Last year, tech giant Toshiba published a report on how IOTA can cater to peer-to-peer energy trading requirements.
They suggested using the IOTA Tangle technology which facilitates feeless micro-transactions without compromising on scalability. Furthermore, the recently introduced IOTA smart contract protocol (ISCP) can come in handy for implementing a double-auction market mechanism with a hierarchical routing structure for interconnected microgrids.