Business Model Evaluation for Peer-to-peer Energy Sharing Systems: Insights from Off-grid DC Microgrid Deployment in Pakistan

The developing world needs viable access to green electricity for the 770 million people without electricity. Microgrids with Distributed Energy Resources (DERs) and advanced information-sharing technologies present a practical solution to give consumers control over energy generation and allow them to share energy in a Peer-to-peer (P2P) system. This increases system efficiency and consumer satisfaction compared to stand-alone PV solutions. Robust business models are needed to facilitate energy trading and to ensure the sustainability and growth of P2P systems in remote communities. In this paper, we propose a business model for a P2P prosumer-based microgrid with DERs that will increase consumer confidence, reduce energy bills and allow seamless system operation. A case study is presented for a DC microgrid deployed in an off-grid village in Pakistan, with a viable business model to cater for the energy and social needs of the community.

I. Introduction

The International Energy Agency (IEA) estimates around 775 million people lived without electricity (end of 2022) [1], most of them belonging to developing Asia and sub-Saharan Africa (SSA). Even though the United Nations Sustainable Development Goal 7 (SDG7) aims to provide "affordable, reliable, sustainable, and modern energy for all" by 2030 [2], the electrification of remote areas through mega projects remains unviable due to limited resources [3], long distances, and the high environmental damage caused by these projects. Progress made by previously completed and on-going projects was further off-set first by COVID-19 [4] and then in 2022 by the Russia-Ukraine war [1]. In addition, under the Paris Agreement, global emissions need to be reduced by 45% by 2030 and reach NetZero by 2050 [5] to keep the global temperature rise under 1.5 ^oC compared to pre-industrial levels. These factors call for greener solutions to meet the energy challenge. Fortunately, regions in South Asia and Africa receive abundant sunlight with solar irradiance levels of more than 5.5 kWh/m²/day for most regions [6]. This makes solar photovoltaic (PV) generation a viable and attractive solution compared to conventional powerhouses. Individual systems (Solar Home Systems (SHS), Residential Home Systems (RHS), solar lanterns, portable solar lights, etc.) provide a basic solution. For example, under the Solar Home Systems Program, the government of Bangladesh provided access to off-grid solar energy systems that benefitted over 20 million people over 15 years [7]. Despite their widespread success, SHSs are suboptimal solutions and cannot exploit the benefits of electricity usage diversity due to the absence of resource sharing, resulting in high power wastage [8] . The remote off-grid communities in Asia and SSA often have poor socioeconomic conditions and need facilities like schools, basic health units and water filtration. The improvement of socioeconomic status remains a question for these regions, and SHSs fail to provide a sustainable solution to their energy related problems [3].