P2P Energy

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An Essay on P2P Energy Policy

The following paper was published in the Acoustic Space Journal. The reference: Papanikolaou, G., and Kostakis, V. (2011) “An Essay on P2P Energy Policy”, in Acoustic Space No. 8: ENERGY, Ed. by Smite, R., Medosch, A., Mey, K., Smits, R., Riga: RIXC; Liepaja: LiepU MPLab, 26-30.


This essay, written in a manifesto form, addresses some crucial issues related to the timely topic of the distributed or Peer-to-Peer (P2P) energy production. It uses the emerging mode of the P2P production in the immaterial field of production (information, culture, knowledge) as a point of departure to realize the dynamics of this new energy technology and shed light on its socio-economic aspects.

The Essay

A radical change in the organization of information production has been observed during last decades. Two parallel shifts have taken place: the most economically advanced societies are moving towards an information based economy while the declining costs of ICT (Information and Communication Technologies) made them available to a much wider fraction of world population. This led to the creation of a new interconnected environment in which a new social productive and exchange model is emerging that is radically different from the industrial one (Benkler, 2006): we are becoming witnesses of the emergence of P2P production (or just peer production).

P2P production is a third mode of production that has been enabled through internet-based coordination, where decisions arise from the free engagement and cooperation of the people, who coalesce to create common value, without the traditional hierarchical organization (Bauwens, 2005; Benkler, 2006). The online free encyclopaedia Wikipedia; and the thousands applications of FLOSS, i.e. Free/Libre/Open Source Software, are very few examples of the legion of the ongoing P2P production projects. This new paradigm has also been called produsage (Bruns, 2008), almost synonym to what we call P2P production, where produsers (producers + users) simultaneously innovate, produce, distribute and consume, premised on an ethos of sharing, communication and collaboration. The hybrid role of produser represents the merging of producer and consumer roles, as the produser is actively involved in the collaborative and constant development of existing content in pursuit of further improvement (Bruns, 2008).

In P2P production, the productive processes are organized with the aid of distributed networks, from the bottom-up, and are based on the free choice of individuals to cooperate – without financial reward being their basic motive – for the accomplishment of common goals or projects.

If the detachment of the means of production and their accumulation by a class of owners was the necessary condition for the development of the capitalist relations, the reunion of the means of production with producers is the most fundamental condition for the genesis of P2P production. Further, the access to distributed capital leads to the creation of a directly accessible infrastructure that allows for the voluntary and autonomous cooperation of individuals giving rise to the concept of produser.

The nature of the current technological infrastructure, which makes the production and distribution of energy possible, does not permit us to talk about P2P production or produsage in the same way as in the sphere of immaterial production. Technological restrictions, such as limited diminution in relation to performance; the relatively high costs for the acquisition of energy producing equipment; and the presence of a hierarchical distribution network of one–way energy flows from big producers to small or bigger consumers, create considerable barriers. Although the horizon for the transgression of these barriers is starting to become visible, it is not imminent: today, it is necessary to plan and effectuate transitional and applicable solutions.

Hence, P2P energy production can be described as the organization of distributed production systems that are interconnected with a network, which permits energy flows from many to many. It is based on the voluntary participation of individual producers, who ideally use renewable sources safeguarding this way a long term sustainability and ecological balance.

P2P energy production is characterized by multiple advantages: it ensures security (the destruction or malfunction of centralised infrastructures paralyses economical activity) and it is also more effective in facing the strategic dangers posed by climate change. Firstly, because it creates a geographically distributed backbone of production activity that deters the depopulation of the countryside, and then because it is friendlier to the environment.

The distributed architecture creates multiple and geographically dispersed positions of dependent work and self–employment in comparison with the concentrative one. Producers adopt a more responsible attitude towards the environment in respect to energy consumption and saving, when they are self-producers and partner managers of their energy sources; it is to their own interest to adopt softer technologies environmentally wise, since they suffer directly by the environmental impacts of their choices.

P2P production can overcome the problem of the absence of social approval for energy investments by local societies, a result of the justified distrust with which the plans of the would-be “green energy squires” are treated. In P2P production the main bulk of energy flows is achieved in the interior of local networks, by saving the energy that is lost during transmission and by reducing the needs for investments on upgrading the networks’ capacity. The interconnection of the electrical network with the internet permits the formation of smart local networks, where energy demands can be adapted to production, minimizing thus the needs for storing that ultimately reduce energy performance. 

The defenders of the current architecture invoke techno-economic arguments such as the high (today) financial performance of concentrative system of electricity production. In these estimates the real cost is obscured, while the negative impacts on society, on the environment, and on future generations are not counted in and remain “external” to the capital performance.

We, therefore, have to invent new indexes that will incorporate the real costs for the society and the environment. For the next years the production of energy will remain an important field of economic activity in the context of the market, so that cost issues will continue to have an incumbent influence on the transition strategies.

Although the genesis of relations of P2P production in the spheres of free software and cultural production was a bottom-up process and was established through legal forms embracing universal property (the Creative Commons or the General Public Licenses, for example), this was made possible because the fundamental prerequisite of the existence of distributed stable capital was already accomplished, via the use of distributed computational power and of a medium (internet) through which, at a low cost, produsers could self-organize. On the contrary, the current cost of technological equipment, technical skills, and the existence, in most cases, of small private properties, make P2P energy production today mainly a business for the middle class. In addition, the current architecture of the electricity network deters a similar “from the bottom-up” emergence of P2P energy production. Although the slow, from the bottom-up development, cannot be ruled out, it is most likely that it will be a parallel “bottom-up” and “top-down” process.

The principal technologies that will prevail in the transitional era (without exhausting the whole picture) are photovoltaic energy production, wind power, and combined heat and power (CHP). The first two use renewable sources, whereas the latter requires raw material that can be differentiated (oil, natural gas, biomass, etc.). The performance of these technologies is greatly dependent on geo-spatial conditions.

Since the access to renewable sources as well as the spatial distribution of human activity is subject to geographical differentiations, we will have to keep an open mind to any technology or mixtures of technologies that can efficiently utilize local wealth and local social conditions. For example, the cogeneration is more suited to dense urban areas where the installation of wind turbines is practically impossible and the use of photovoltaics impinges on the complexity of administrative barriers, especially when it involves the presence of multiple small properties.The use of photovoltaics is favored by appropriate architectural design of isolated houses in areas of long sunshine duration, whereas the wind potential is richer in island areas of the country.

Policies have to allow for the biggest possible freedom of choice to the producers as to what modes of production will be used and what types of institutional form the cooperation will take, whereas central planning might be proven catastrophic. In reality, central planning will have to be limited to the formation of a loose regulatory framework of participation that will mainly aim at safeguarding ecological sustainability. The production potential of individuals and local societies will have to be set free in order to organize -using the inventiveness that characterizes collective participation- local networks of energy production and distribution.

Policy measures like subsidizing the Kwh generation/consumption are simple to implement and might be quite effective in a transition period, helping the quick return on investments; enhancing thus the necessary distribution of stable capital. We ought to be cautious, however, because these types of policies can disproportionally burden the economically weaker, disrupting in this way the necessary political and economical alliances that constitute the middle class. In the cases of medium sized installations that primarily serve the needs of a geographic community, various patterns of cooperation amongst producers can be developed. The creation of stock companies with transferable shares should not be subsidized and the property rights, which will be strictly confined to the inhabitants of the local society, must be universal and non transferable.

The ownership, the management, in a few words the architecture of the relations that the distribution network defines, form the meeting and conflict point of different social interests. It becomes, thus, the central focal point of policy making. Its public (and not necessarily state) character will have to be secured, its absolute independence from governmental and large corporations, as well as the priority of its use by small producers against big ones. Local societies must have the right to install and manage their own networks.

The technological equipment of the devices interconnecting producers should have an open design and operate via open protocol standards communication. This way, the establishment of strategic monopoly control in the operations of the network by the state and by large corporations (similar to the current established standard that controls telecommunication infrastructures) will be prevented and innovation will be able to develop. At the same time, an opportunity for development will be offered to many medium–small businesses of intensive knowledge having small needs for venture capital. The collective participation of the producers through the open architectures will accelerate the maturation of its services.

Open planning can be supported by the research partnerships of universities, research institutes and private companies. Their research results, at least to the extent that tax payers’ money is used, must necessarily and directly fall under the public sphere in the shape of licenses of non exclusive property. In this way, research results could be diffused directly and little businesses that lack the potential to finance research and development can also utilize them.

The current organization of the network tends towards the establishment of an obligatory intermediary, who will intermediate in all exchanges. As favorable as this deal may seam, the intervention of an obligatory intermediary in energy flows introduces a hierarchical element that poses arbitration risks. The sale prices for small producers will finally have to shape freely and the consumers themselves should be the direct buyers in a smart, emancipated and P2P informed energy market. Such a network must permit the direct interconnection and negotiation of many among many, a fact that requires a different topology and technology of interconnection than the one imposed today.

Technological choices are not socially neutral. The dominant public discourse tends to underestimate this aspect and displaces public dialogue in ostensibly technocratic controversies. Behind energy choices and the arguments their defenders evoke, we must detect the interweaving net of corporation interests, social classes, social groups and expressions of political power.

We find ourselves in the middle of a crossroads of renegotiation of almost all of the up to date “constants” of our social and political system, under the weight of a systemic crisis and the unprecedented threat of an ecological disaster. The political powers that aspire to rule in this historical period must prove that they can face and manage, in the name of society as a whole, the problem of sustainable development. In this way, the so-called “green development” will be a common appeal of the entire political spectrum. Its focal point is the architecture of the energy–electricity production process. This is where social and class interests meet and clash and the different strategies unfold.

Since the direct production process is the one that defines distribution, the single most important innate advantage of P2P production is that it ensures, on a long term and on a stable basis, a fairer and more equal distribution of wealth. In P2P energy production the largest part of the energy produced is intended for individual consumption, limiting the field of the market to exchanges of energy. A network that allows, without the mandatory intervention of a third party, the reversal of energy flows between peers, delimitates even more the sphere of the market and the official monetary circulation.

The quality features of the architecture of P2P production build a new economy of autonomy and solidarity that is developed within the capitalist mode of production. P2P energy production launches a triple redistribution: redistribution from the few and large to the small and many; from the city to the countryside; and from the older to the younger generations. The latter not only because younger people as natural carriers of new technologies will secure more jobs and business opportunities, but also because it raises their environmental shares.

In an unstable historical period, submerged in economic insecurity, the middle class senses the opportunity offered by P2P energy production. By investing in it, the energy safety of households in secured, jobs are created, and a steady income is generated, while it is also beneficial to the environment. In any case, it is an attractive refuge for the financial reserve, at least against the alternative of a parasitic financial system, which is under the threat of collapse. Under conditions of economic crunch, the tax payers face with hostility the idea to subsidize -in the name of the environment- the creation of private investments the products of which they will have the obligation to buy afterwards. More so, when they can become producers of this commodity. This condition brings political claims for distributed access to stable capital (means of energy production) much closer than we imagine today.

These tendencies are, for the moment, organized in a fragmentary manner through civil society organizations, and civic movements that are often manifested by their resistance to the political and financial choices of organized corporate interests and of a state that operates under their influence. The inevitable progressive awareness will sharpen the political struggles giving them an increasingly positive object of contention. The success of a fast P2P transformation in energy production would require a “partner state”, i.e. a transformed state that will move from being a patron of corporate interests to being a supporter and organizer of the networks’ productive activities.


Bauwens, M. (2005) The Political Economy of Peer Production, Ctheory Journal at http://www.ctheory.net/articles.aspx?id=499 (retrieved 28 March 2010).

Benkler, Y. (2006) The Wealth of Networks: How Social Production Transforms Markets and Freedom, New Haven – London: Yale University Press.

Bruns, A. (2008) Blogs, Wikipedia, Second Life, and Beyond: From Production to Produsage, New York: Peter Lang.

Author’s note

Precursor of this article is George Papanikolaou’s “Peer to Peer Energy Production and the Social Conflicts in the Era of Green Development” published at a special issue of the online journal Re-public about P2P energy at http://www.re-public.gr/en/?cat=53 (retrieved 28 March 2010). The final manifesto edition was cured and enriched by Vasilis Kostakis.

George Papanikolaou (MD, PhD) is a medical doctor interested in researching the social, political and economic science. He is the prominent figure of the Greek P2P Foundation as well as the translator into Greek of essays such as “The Political Economy of Peer Production” (written by Michel Bauwens) and others.

Vasilis Kostakis (MA, MSc, BSc) has studied business science, information management, political theory and technology governance. At the moment, he is a PhD student at TUT on technology governance; a member of P2P foundation; and a collaborator of the online journal Re-public.

P2P energy production and distribution

See the special issue of the on-line, political journal Re-public.

From http://www.re-public.gr/en/?cat=53

"While writing the text of the call for papers for the current issue, our primary aim was to invite contributions towards a critical view of the Peer-to-Peer (P2P) energy production and distribution. However, a call for papers has always been an open challenge — being unsure of what and where you will finally get — and so we came to understand that in fact, before critically examine the aforementioned, a solid, integral theoretical framework has to be articulated.

Hence, the papers and the interviews included in this special issue describe the certain context in which discussions and experiments, about and with these alternative modes of energy production and distribution, are taking place. Moreover, this issue sheds light on the relevant infrastructures; provides assumptions about the future; refers to the Greek case; and deals with the emerging political economy of P2P energy production and distribution.

Hopefully this issue will serve as a stepping stone towards a better realization of the P2P paradigm’s potential and its application to the real world."

Vasilis Kostakis, Guest Editor

Contributors include:

Michel Bauwens – Setting the broader context for P2P infrastructures: The long waves and the new social contract

Walt Patterson – Infrastructure keeps the lights on

Eric Hunting – On the prospects and strategy of peer-to-peer energy

Hermann Scheer – Towards a new energy revolution

George Papanikolaou – Peer to Peer energy production and the social conflicts in the era of “green development”

Stelios Stavroulakis – The urgency of peer-to-peer communities for a smooth transition to renewables

Vijay Vaitheeswaran – Micropower and the coming energy revolution

Michalis Psalidas – Emerging tendencies in the production, distribution and use of electrical power

Andrianos Tesas – The electricity market, p2p energy and smart grids in Greece

José Morales Barroso – P2P energy and the information grid