Challenges and prospects for negawatt trading in light of recent technological developments


With the advancement of the smart grid, the current energy system is moving towards a future where people can buy what they need, can sell when they have excess and can trade the right of buying to other proactive consumers (prosumers). Although 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 be addressed for fully functional negawatt trading mechanisms in today’s energy market.

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Fig. 1: Challenges of negawatt trading.
Fig. 2: Market for peer-to-peer negawatt sharing.
Fig. 3: IoT for prosumers decision-making.


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This work was supported in part by the Advance Queensland Industry Research Fellowship AQRF11016-17RD2, in part by the University of Queensland Solar (UQ Solar;, in part by the SUTD-MIT International Design Centre (IDC; and in part by the US National Science Foundation under grants DMS-1736417 and ECCS-1824710.

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Tushar, W., Saha, T.K., Yuen, C. et al. Challenges and prospects for negawatt trading in light of recent technological developments. Nat Energy (2020).

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