There is, I think, something ethereal about i —the square root of minus one. I remember first hearing about it at school. It seemed an odd beast at that time—an intruder hovering on the edge of reality.

Usually familiarity dulls this sense of the bizarre, but in the case of i it was the reverse: over the years the sense of its surreal nature intensified. It seemed that it was impossible to write mathematics that described the real world in …

I and i

The advent of more proactive consumers, the so-called “prosumers”, with production and storage capabilities, is empowering the consumers and bringing new opportunities and challenges to the operation of power systems in a market environment. Recently, a novel proposal for the design and operation of electricity markets has emerged: these so-called peer-to-peer (P2P) electricity markets conceptually allow the prosumers to directly share their electrical energy and investment. Such P2P markets rely on a consumer-centric and bottom-up perspective by giving the opportunity to consumers to freely choose the way they buy their electric energy. A community can also be formed by prosumers who want to collaborate, or in terms of operational energy management. This paper contributes with an overview of these new P2P markets that starts with the motivation, challenges, market designs moving to the potential future developments in this field, providing recommendations while considering a test-case.

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Peer-to-peer and community-based markets: A comprehensive review

Peer-to-peer trading is a next-generation energy management technique that economically benefits proactive consumers (prosumers) transacting their energy as goods and services. At the same time, peer-to-peer energy trading is also expected to help the grid by reducing peak demand, lowering reserve requirements, and curtailing network loss. However, large-scale deployment of peer-to-peer trading in electricity networks poses a number of challenges in modeling transactions in both the virtual and physical layers of the network. As such, this article provides a comprehensive review of the state-of-the-art in research on peer-to-peer energy trading techniques. By doing so, we provide an overview of the key features of peer-to-peer trading and its benefits of relevance to the grid and prosumers. Then, we systematically classify the existing research in terms of the challenges that the studies address in the virtual and the physical layers. We then further identify and discuss those technical approaches that have been extensively used to address the challenges in peer-to-peer transactions. Finally, the paper is concluded with potential future research directions.

Peer-to-Peer Trading in Electricity Networks: An Overview

The increasing uptake of distributed energy resources in distribution systems and the rapid advance of technology have established new scenarios in the operation of low-voltage networks In particular, recent trends in cryptocurrencies and blockchain have led to a proliferation of peer-to-peer (P2P) energy trading schemes, which allow the exchange of energy between the neighbors without any intervention of a conventional intermediary in the transactions Nevertheless, far too little attention has been paid to the technical constraints of the network under this scenario A major challenge to implementing P2P energy trading is ensuring network constraints are not violated during the energy exchange This paper proposes a methodology based on sensitivity analysis to assess the impact of P2P transactions on the network and to guarantee an exchange of energy that does not violate network constraints The proposed method is tested on a typical UK low-voltage network The results show that our method ensures that energy is exchanged between users under the P2P scheme without violating the network constraints, and that users can still capture the economic benefits of the P2P architecture

Decentralized P2P Energy Trading Under Network Constraints in a Low-Voltage Network

With the sustained deployment of distributed generation capacities and the more proactive role of consumers, power systems and their operation are drifting away from a conventional top–down hierarchical structure. Electricity market structures, however, have not yet embraced that evolution. Respecting the high-dimensional, distributed and dynamic nature of modern power systems would translate to designing peer-to-peer markets or, at least, to using such an underlying decentralized structure to enable a bottom–up approach to future electricity markets. A peer-to-peer market structure based on a multi-bilateral economic dispatch (MBED) formulation is introduced, allowing for multi-bilateral trading with product differentiation, for instance based on consumer preferences. A relaxed consensus + innovation (RCI) approach is described to solve the MBED in fully decentralized manner. A set of realistic case studies and their analysis allow us to show that such peer-to-peer market structures can effectively yield market outcomes that are different from centralized market structures and optimal in terms of respecting consumers preferences while maximizing social welfare. Additionally, the RCI solving approach allows for a fully decentralized market clearing that converges with a negligible optimality gap, with a limited amount of information being shared.

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Consensus-Based Approach to Peer-to-Peer Electricity Markets With Product Differentiation

While power system organization has evolved from a hierarchical structure to a more decentralized model, electricity markets are still not up to date with the ongoing transformation toward more consumer-centric economies. As information and communication technologies are broadly adopted, they allow prosumers to have a more proactive role in power system operation. This work introduces the concept of energy collectives, as a community-based electricity market structure. We find that when prosumers are allowed to share energy at community level, the overall electricity procurement for the community reflects prosumers’ preferences. We show that community members can be influenced by a supervisory third-party in charge of interfacing with the market and system operator and of guaranteeing the collective common agreements. We simulate a number of test cases and apply typical principles from analysis of communication networks and distributed systems to assess community fairness.

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Energy Collectives: A Community and Fairness Based Approach to Future Electricity Markets

Building on the concepts of trans active energy and consumer-centric electricity markets, the interest in community-based and peer-to-peer structures to energy transactions and management has substantially increased over the last few years. However, several computational challenges are to be tackled in order for these approaches to be deployed in real-world applications. Our aim here is to identify and analyze these challenges, by comparing distributed community-based market approaches to decentralized and distributed versions of peer-to-peer electricity markets. We show convergence trends of the investigated algorithms as well as how they respond to larger number of participants and presence of asynchronicities. Our findings highlight the practical challenges to face with these setups, in particular with peer-to-peer markets, justifying the further proposal of hybrid approaches and of sparsification of negotiation processes.

Negotiation Algorithms for Peer-to-Peer Electricity Markets: Computational Properties

The increasing share of more proactive actors in the electricity market supports the proposal of novel schemes to accommodate a more decentralized paradigm to power system and electricity market operation. The resulting prosumer markets may be identified as belonging to various classes such as prosumer grid integration, peer-to-peer models and prosumer community groups. We show here that they all can be modelled within a unified peer-to-peer market model but with different communication structures. Consequently, we profit of this unified formulation to compare these structures in terms of efficiency and convergence speed, as well as by generally looking at the effect of sparsification of those communication structures on market outcomes and convergence speed. The open-source simulation platform developed for that purpose may be readily used by others to study and analyze prosumer markets.

Fabio Moret

Papers

Peer-to-peer and community-based markets: A comprehensive review

Energy Collectives: A Community and Fairness Based Approach to Future Electricity Markets

Negotiation Algorithms for Peer-to-Peer Electricity Markets: Computational Properties

Prosumer Markets: A Unified Formulation

Heterogeneous risk preferences in community-based electricity markets