[Paper Review] Quartierstrom -- Implementation of a real world prosumer centric local energy market in Walenstadt, Switzerland

Liliane Ableitner, Arne Meeuw+4 more|arXiv (Cornell University)|May 17, 2019

Smart Grid Energy Management22 citations

TL;DR

This paper presents Quartierstrom, a real-world blockchain-based peer-to-peer energy market in Walenstadt, Switzerland, enabling prosumers and consumers to directly trade locally generated solar electricity at user-defined prices. The system uses a double-auction mechanism with dynamic pricing, smart meter data, and a web-based interface to incentivize local energy consumption, reduce grid costs, and improve self-consumption—demonstrating technical and user acceptance feasibility in a 37-household pilot.

ABSTRACT

Prosumers in many regions are facing reduced feed-in tariffs and currently have no possibility to influence the level of remuneration for the locally produced solar energy. Peer-to-peer communities may offer an alternative to the feed-in tariff model by enabling prosumers to directly sell their solar energy to local consumers (possibly at a rate that is beneficial for both consumer and prosumer). The Quartierstrom project investigates a transactional energy system that manages the exchange and remuneration of electricity between consumers, prosumers and the local electric grid provider in the absence of intermediaries. This whitepaper describes the prototypical real-world system being implemented in the town of Walenstadt, Switzerland, with 37 participating households. The community members of this pilot project pay a reduced tariff for grid usage if the electricity produced by a prosumer is sold to another community member, which is located on the same voltage or grid level downstream a substation1. Such a tariff structure incentivizes local balancing, i.e. locally produced energy can be consumed locally whenever possible to avoid costs from higher grid levels. The blockchain is a novel technology suitable to log the produced and consumed units of energy within a community, making it possible to implement market places. In those marketplaces, both prosumers and consumers can indicate a price at which they are willing to sell / buy locally produced solar energy without the intermediation of a utility. The key goals of this project are the assessment of A) the technical, economical and ecological feasibility of a blockchain-based community energy system regarding local utilization of solar energy, grid quality and energy efficiency and B) resulting dynamics regarding local market prices and user acceptance.

Motivation & Objective

• To assess the technical, economic, and ecological feasibility of a blockchain-based local energy market for prosumers and consumers.
• To evaluate the impact of location-based grid pricing on local energy consumption and grid efficiency.
• To study user acceptance and behavioral dynamics in a community energy trading system.
• To explore how decentralized energy trading can improve self-consumption and reduce reliance on centralized grids.
• To test a novel bottom-up tariff model that incentivizes local energy balancing despite lack of regulatory support.

Proposed method

• Implementation of a blockchain-based double-auction mechanism for peer-to-peer electricity trading among 37 households in Walenstadt, Switzerland.
• Integration of smart meter data to track real-time production and consumption for accurate transaction settlement.
• Development of a web application using Flask and Bootstrap to enable users to set buy/sell price limits and monitor energy and financial data.
• Use of dynamic price sliders to allow prosumers to set minimum selling prices and consumers to set maximum buying prices.
• Monthly email reports and user interface feedback loops to monitor engagement and system usage.
• Future integration of community-level battery storage to optimize energy flow and increase self-sufficiency.

Experimental results

Research questions

• RQ1 Can a blockchain-based P2P energy market successfully enable direct local trading of solar electricity among prosumers and consumers in a real-world setting?
• RQ2 How do user-defined price limits affect transaction frequency, self-consumption rates, and financial outcomes in a community energy system?
• RQ3 To what extent does the proposed location-based grid tariff model reduce grid usage costs and encourage local energy balancing?
• RQ4 What is the level of user acceptance and engagement in a community energy trading system with transparent, real-time feedback?
• RQ5 How does the integration of community-level battery storage improve energy efficiency and self-sufficiency compared to household-level storage?

Key findings

• The Quartierstrom system successfully launched in January 2019 and operated for one calendar year, collecting comprehensive consumption, production, and trading data.
• Almost all participating households created accounts, and most logged in frequently to monitor data or adjust price settings, indicating strong user engagement.
• The system demonstrated technical feasibility of a blockchain-based double-auction mechanism for local energy trading with real-time data integration.
• The web interface with dynamic price sliders and real-time KPIs (e.g., self-consumption, self-sufficiency) was effective in providing transparency and supporting user decision-making.
• The project confirmed that community-level battery integration—planned for second half of 2019—could enhance self-consumption and energy efficiency more effectively than household-level storage.
• Despite no regulatory support for the novel tariff model, the project successfully tested a bottom-up approach to grid cost allocation by covering higher-level grid costs from research funding.