Design choices in peer‐to‐peer energy markets with active network management

Abstract

Due to the growing number of Distributed Energy Resources and new electrical loads at the sectoral contact points, novel organisational forms such as Local Energy Markets arise to deal with increasing complexity in the energy system. However, these markets are radically different from traditional energy markets, as they often allow individual prosumers to trade with each other via a peer-to-peer scheme. To guarantee tamperproof settlement, an increasing number of these markets feature a distributed ledger technology. This paper analyses different design variants of peer-to-peer markets, focusing specifically on the allocation mechanism under network constraints as these mechanisms constitute the core component of a market design. We assess these designs concerning user acceptance, economic performance, practicability, and their ability to relieve grid congestion. Further key performance indicators also cover communal revenues or welfare distribution. For this purpose, we developed an agent-based simulation framework, which builds on data from three German reference municipalities derived from a novel clustering approach. Besides a consolidated presentation of the results, we highlight current implementation obstacles and identify promising concepts for further research.

A diversified portfolio of tokenised revenue streams can provide hedging opportunities for renewable electricity generators

“…The sum of each column must be one, representing 100% of each participant's portfolio, as in the equality constraint in Equation (22). A generator may choose to keep a portion of their own revenue (ϕ i ) for themselves, as in the inequality constraint Equation (23).…”

“…This allows for the autonomously chaining together of constituent financial operations as a means to distribute and claim funds. Much like the underlying blockchain technology [20], DEFI has been the subject of much research attention in the world of energy [21] and is proposed as an alternative means of implementing exotic payment methods and market structures [21][22][23]. This paper attempts to chart and articulate what a potential use-case could look like.…”

Integrating Peer-to-Peer Energy Trading and Flexibility Market With Self-Sovereign Identity for Decentralized Energy Dispatch and Congestion Management

“…Moreover, the distributed functions decrease the computational burden at any single point, enhancing scalability. At the same time, the separation of the two markets ensures lower matching complexity and higher transparency for the participants [55]. Despite an overall loss of computational efficiency compared to variants that take grid restrictions into account directly in dispatch, downstream flexibility markets have been the subject of practical research projects for several years [56] and can nowadays meet the regulatory requirements in terms of unbundling better than integrated variants.…”

“…The separation of the flexibility market allowed us to implement the energy market as a double-sided call auction featuring an open order book without the need to account for technical constraints. Double-sided call auction is a trading system where buy and sell orders are collected over a fixed period and then matched at a single price [55]. Compared to continuous auctions that continuously allocate the next matching bid-ask-pair, a call auction can improve the turnover as the market agent optimizes the allocation of bids and asks [55].…”

“…Double-sided call auction is a trading system where buy and sell orders are collected over a fixed period and then matched at a single price [55]. Compared to continuous auctions that continuously allocate the next matching bid-ask-pair, a call auction can improve the turnover as the market agent optimizes the allocation of bids and asks [55]. This means that a single local marketplace exists where all energy bids and energy asks are sent by the prosumer-agents to the market-agent and the latter stores all the energy bids and asks in the order book.…”