India Set to Revolutionize Electricity Market with Peer-to-Peer Energy Trading
In a groundbreaking move, the Indian government is poised to launch a new facility that will empower consumers to directly buy and sell electricity among themselves. This innovative system will seamlessly adjust transaction amounts within monthly power bills, marking a significant shift in how energy is traded across the nation.
How Peer-to-Peer Energy Trading Works
Peer-to-peer (P2P) energy trading, developed under the India Energy Stack (IES), will enable electricity consumers and prosumers—individuals who both consume and generate power through renewable sources like rooftop solar—to trade surplus renewable energy directly. This trading can occur even across state boundaries, facilitated by a trust-based digital framework designed to ensure security, verifiability, and scalability.
To participate, buyers must have a smart electricity meter, while sellers need a rooftop solar plant and a net meter to trade excess energy. Through a dedicated mobile application, the two parties can negotiate prices and complete transactions efficiently. Officials have clarified that consumers will continue to receive their regular electricity bills, with P2P trades reflected as cumulative adjustments in the billing systems of distribution companies (discoms).
Benefits for Consumers and Prosumers
This system offers dual advantages: prosumers can easily monetize surplus electricity, earning additional income, while buyers gain access to greener power at rates often cheaper than those charged by traditional discoms. The initiative aims to promote renewable energy adoption and enhance consumer choice in the electricity market.
Launch and Initial Rollout
P2P trading is part of the IES being developed by REC Limited and is scheduled for launch during the IndiaAI Summit later this month. Initially, the facility will be available to consumers in specific regions, including south, southwest, west, north, and northwest Delhi, as well as parts of western Uttar Pradesh. Three distribution companies—BSES Rajdhani Power Limited, Tata Power-Delhi Distribution Limited, and Paschimanchal Vidyut Vitran Nigam Limited (PVVNL)—will spearhead the rollout.
Together, these utilities serve approximately 1.25 crore consumers, but the pilot phase will begin with around 1,000 consumers in each discom area. PVVNL managing director Raveesh Gupta highlighted that diverse consumer groups, such as farmers, small businessmen, and domestic users, are being identified for onboarding. Eventually, all discoms are expected to offer this facility nationwide.
Global Context and India's Renewable Goals
Similar P2P energy trading models are already operational in parts of Europe and Australia, where regulated local energy markets facilitate consumer-to-consumer trading of renewable power. In India, this initiative aligns with broader renewable energy targets. The country currently boasts an installed power capacity of 513.7 GW, including 266.8 GW from non-fossil sources, with solar contributing 135.8 GW. The government has set an ambitious goal of achieving 500 GW of non-fossil energy by 2030.
Supporting this, the Pradhan Mantri Surya Ghar Yojana, launched in February 2024, has already led to the installation of over 20.8 lakh rooftop solar systems, benefiting more than 26.1 lakh households.
Digital Infrastructure and Security Measures
A Tata Power-DDL spokesperson explained that consumers and prosumers will be onboarded through digital platforms for registering and operating trades. Participants will need to download applications developed by trading platform service providers, with details on user interfaces—whether dedicated apps or web-based access—to be shared during onboarding by respective discoms.
All transactions will be conducted digitally under a discom-supported framework, ensuring transparency, reliability, and consumer protection. A key feature is the use of a 'Verified Credential' (VC), a secure digital identity that confirms participants as genuine discom customers with verified metering and eligibility, safeguarding system integrity.
Operational Framework and AI Integration
REC executive director Prince Dhawan detailed that the trading platform will handle secure matching, accounting, and settlement of transactions, while discoms will continue providing smart-meter data, grid management, and consumer services. The platform will read data from a central ledger where discoms upload actual consumption and export data, settling final transactions between peers. Some platforms will incorporate AI agents to assist customers in the trading process.
Dhawan added that, as per regulatory approvals, discoms can apply wheeling and transmission charges directly in bills, with these charges displayed upfront to consumers on the platform for clarity.
This initiative represents a significant step towards a more decentralized and consumer-driven energy ecosystem in India, leveraging technology to enhance efficiency and sustainability in the power sector.
