Glossary of Terms

Peer-to-peer (P2P) energy trading

Aggregator  – Third party intermediaries specialising in coordinating and aggregating demand response from individual consumers to meet industry parties’ technical requirements for specific routes to market.

Bilateral Energy Trading – Market with energy transactions that are negotiated directly between individual generators and consumers.

Cost Reflective Pricing – Pricing which allocates network fixed costs according to their cause.

Distributed Energy Resources – Distribution network generation sources, energy storage systems and flexible loads.

Federated Power Plant – A virtual power plant formed through peer-to-peer transactions between self-organizing prosumers.

Microgrid – A cluster of loads and distributed energy resources within with an electrical boundary, which can operate as part of a power system or autonomously in islanded.

Multi-class Energy Management – Treating energy as a heterogeneous product (rather than a homogeneous product), based on attributes of its source which are perceived by prosumers to have value.

Nanogrid – A smaller version of a microgrid, consisting of a single building.

Nodal Pricing – Electricity prices that vary by network location, to account for losses and congestion.

Peer-to-Peer Energy Trading Platform – A software platform allowing prosumers to trade electrical energy with one another directly. Energy transactions could vary in terms of quantity, time-scale and acceptable variability, and may be network-location-specific.

Peer-to-Peer Market – Markets set up to create trade between large numbers of fragmented buyers and sellers. This allows small suppliers to compete with traditional providers of goods or services. Prominent examples include eBay, Uber, and Airbnb.

Pool-Based Energy Trading – Centralized market with a system operator that dispatches generation to meet demand, based on either bids or variable-costs reported by generators.

Prosumer – Electricity consumers with distributed energy resources who proactively manage their production, consumption and storage of energy.

Transactive Energy – Term used by the Gridwise Council to describe techniques for managing the generation, consumption or flow of electric power within an electric power system through the use of economic or market-based constructs while considering grid reliability constraints.

Virtual Power Plant – A collection of distributed energy resources that are coordinated to have visibility, controllability and impact at the transmission level of the power system.