Price-Guided Peer-To-Peer Trading Scheme and Its Effects on Transaction Costs and Network Losses

Abstract

Distributed energy resources (DERs), such as small-scale renewable energy generators, storage systems, and controllable loads, have been attracting great attention. Accordingly, interest in peer-to-peer (P2P) energy trading between prosumers with DERs is growing. The prosumers may perform the P2P electricity trading within the loss-guided framework, where network losses are primarily considered during the peer matching process. However, the loss-guided framework has limitations in that prosumer welfare is neglected in favor of prioritizing the network losses caused by the P2P transactions. Thus, in this study, a price-based framework for P2P electricity trading is suggested, where the prosumer welfare is considered by including not only network loss costs but also energy costs in the matching procedure. The effects of the suggested price-based framework on network efficiency, prosumer welfare, and social welfare are examined by comparing simulation results with the loss-guided framework and the random transactions. Further, how those three properties are affected by the change in loss price is analyzed and a guideline for the suitable choice of the loss price is suggested.