Consensus‐based decentralized energy trading for distributed energy resources

Abstract

In smart grids, distributed energy resources (DERs) have penetrated residential zones to provide a new form of electricity supply, mainly from renewable energy. Residential households and commercial buildings with DERs have become prosumers in local grids because they can sell surplus power to others. Research has been initiated to integrate and utilize DERs through better control and communication strategies. With the advances in the Internet of Things (IoT) technology, unprecedented coordination among DERs can be achieved to facilitate energy trading and transactive energy management. However, preventing leakage of user information during the optimization process remains a challenge for researchers, which drives them to develop privacy‐preserving energy management systems. In this study, a fully decentralized transactive energy management method using a consensus‐based algorithm is developed. Specifically, a virtual pool is designed for prosumers to trade energy and exchange information with the support of IoT technologies. The consensus‐based algorithm enables prosumers to obtain an optimal energy schedule independently in a coordinated manner without revealing any personal data. Practical data was used to perform simulations and validate the proposed algorithm. The results showed that the authors' consensus‐based decentralized transactive energy management strategy is feasible and can significantly reduce the overall system cost.

Sharing Economy in Local Energy Markets

“…In [53], a distributed optimization program is implemented in an agent-based model in LEMs to protect the information privacy of different market participants. The above distributed solution needs to converge to the market equilibrium and obtain the clearing results through distributed iteration process [54]- [56]. However, the iterative solution is inconsistent with the actual market transaction process, and it is difficult to accurately quantify the underlying economic intuition as well as utility function of participants in local energy sharing.…”

Towards transactive energy: An analysis of information‐related practical issues

“…For example, an energy sharing mechanism based on information exchange between neighbours was proposed in [59]. A consensus-based variant of the dual decomposition method and the ADMM method were applied in [60,61] and [62][63][64], respectively.…”

Blockchain for peer-to-peer energy trading

“…Hence, with proper designs of necessary information exchange protocols, DERs can cooperatively solve energy management and trading problems in decentralized and distributed manners. For example, decentralized solution methods have been proposed in [21], [22]. A fully decentralized energy market at the distribution level was developed in [21] without cooperation among market participants.…”

“…A fully decentralized energy market at the distribution level was developed in [21] without cooperation among market participants. Wang et al in [22] developed a fully decentralized transactive energy management system using a consensus-based algorithm and designed a virtual pool for DER prosumers to trade energy without revealing private information. However, one of the challenges to decentralized methods is that prosumers or DERs do not have global information, particularly about the energy network.…”

“…, ∀t ∈ H} for Constraint (22), and obtain the augmented Lagrangian as subject to Constraints ( 14) − ( 19), ( 21) and ( 23)…”