Energy Resources (DERs) are being integrated into the power market by customers rather than large scale energy suppliers, thereby slowly transforming the centralized, unidirectional market to a decentralized, bidirectional market and transitioning customers into prosumers. Various system architectures are used in the real field to coordinate the energy distribution in the micro/ mini-grids integrated with DERs, all of which have their strengths, weaknesses and challenges. Peer-to-peer (P2P) is an emerging architecture in the field of electrical energy trading and Distributed Generation (DG) management that can be applied in local energy markets. This paper focuses on P2P energy trading, with an in-depth discussion on its various operating algorithms, their principles, characteristics, features and scope through state of art review on P2P. Furthermore, the energy system of Nepal is used as a case study in this paper, and the micro/mini-grids of Nepal and their associated challenges, constraints and opportunities for improvement are discussed. Finally, an energy trading model is proposed to address the problems occurring in the specific case of Nepalese energy market.

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