Karnataka Unveils Peer-to-Peer Solar Energy Trading Regulations

The Karnataka Electricity Regulatory Commission (KERC) has recently announced a regulatory framework aimed at transforming the solar energy landscape in the state. The KERC (Implementation of Peer to Peer Solar Energy Transaction) Regulations, 2024, effective from August 6, 2024, introduce a novel approach to solar energy transactions by facilitating peer-to-peer (P2P) exchanges.

This move is set to revolutionise how consumers and prosumers interact within the solar energy market. The core objective of these regulations is to enhance the utilisation of rooftop solar photovoltaic systems by enabling direct energy transactions between consumers. This P2P model allows individuals who generate surplus solar energy to sell it directly to other consumers, bypassing traditional energy distribution channels.

To support these transactions, a blockchain-based platform will be employed, ensuring transparency, security, and efficiency in energy trading. By leveraging this technology, KERC aims to make solar energy more accessible and economically viable for a broader segment of the population. Participants in this P2P energy market will include both solar energy producers (prosumers) and consumers.

To qualify, they must be registered with their respective distribution licensees and use smart or time-of-day meters to accurately measure energy consumption and production. This registration process ensures that all transactions are monitored and accounted for, maintaining the integrity of the energy market.

The transactions themselves will be conducted through a P2P platform managed by registered service providers, who will oversee the operation and maintenance of these digital marketplaces. One of the key features of the new regulations is the flexibility in pricing. Participants in the P2P market will have the freedom to negotiate prices for their energy transactions. Prices can be set based on the highest amount a buyer is willing to pay or the lowest price a seller is prepared to accept, or a combination of these factors.

This dynamic pricing mechanism is designed to reflect real-time market conditions and optimise the allocation of solar energy resources. In cases where energy produced by a prosumer exceeds local demand or if there are no buyers available, the surplus energy will be sold back to the distribution licensee at a fixed rate. The regulations also address scenarios where P2P transactions are insufficient to meet a consumer’s energy needs. In such instances, the shortfall will be supplied by the distribution licensee, ensuring that consumers have a reliable source of energy.

Conversely, if a prosumer is unable to sell their surplus energy through the P2P platform, they can still rely on the distribution licensee to purchase the excess at the pre-established rate. This dual mechanism helps to balance supply and demand while maintaining stability in the energy market. Service providers play a crucial role in this new framework. They are responsible for managing the P2P platforms, integrating technical systems, ensuring data privacy, and conducting user training. Their responsibilities also include raising awareness about the P2P system and assisting both consumers and distribution licensees in navigating the new regulations. The billing for P2P transactions will align with the billing cycles of distribution licensees, and service providers will handle all aspects of invoicing and settlement based on the agreed-upon transaction prices.

Overall, the introduction of these regulations represents a significant step forward in Karnataka’s efforts to promote renewable energy. By facilitating peer-to-peer transactions, KERC aims to create a more flexible and efficient energy market, encourage greater investment in solar energy, and support the state’s broader sustainability goals. The new framework not only supports the growth of solar energy adoption but also contributes to a more innovative and consumer-centric energy landscape.