Challenges and Prospects of Negawatt Trading in Light of Recent Technological Developments

TL;DR

This paper reviews the technological challenges and opportunities for implementing negawatt trading in smart grids, highlighting existing technologies that can facilitate its adoption and identifying remaining hurdles.

Contribution

It provides a comprehensive review of recent technological advancements that enable negawatt trading and discusses the challenges to its full implementation in modern energy markets.

Findings

Emerging technologies like distributed ledger can support fair negawatt trading.

Methodologies for negawatt trading are largely available but require further development.

Additional challenges remain for full market integration of negawatt trading.

Abstract

With the advancement of the smart grid, the current energy system is moving towards a future where people can buy what they need, sell when they have excess, and can trade the right of buying to other prosumers. While the first two schemes already exist in the market, selling the right of buying, also known as negawatt trading, is something that is yet to be implemented. Here, we review the challenges and prospects of negawatt trading in light of recent technological advancements. Through reviewing a number of emerging technologies, we show that the necessary methodologies that are needed to establish negawatt trading as a feasible energy management scheme in the smart grid are already available. Grid interactive buildings and distributed ledger technologies for instance can ensure active participation and fair pricing. However, some additional challenges need to address for fully functional negawatt trading mechanisms in today's energy market.