Using peer-to-peer energy-trading platforms to incentivize prosumers to form federated power plants

Abstract

Power networks are undergoing a fundamental transition, with traditionally passive consumers becoming 'prosumers' -proactive consumers with distributed energy resources, actively managing their consumption, production and storage of energy. A key question that remains unresolved is, how can we incentivise coordination between vast numbers of distributed energy resources, each with different owners and characteristics? Virtual power plants and peer-to-peer energy trading offer different sources of value to prosumers and the power network and have been proposed as different potential structures for future prosumer electricity markets. In this Perspective, we argue they can be combined to capture the benefits of both. We thus propose the concept of the federated power plant, a virtual power plant formed through peer-to-peer transactions between self-organising prosumers. This addresses social, institutional and economic issues faced by top-down strategies for coordinating virtual power plants, while unlocking additional value for peer-to-peer energy trading.

A coalition formation game framework for peer-to-peer energy trading

“…P2P trading is an emerging economic model that allows commodities such as energy to go from one prosumer to another rather than from the grid to the consumer [4], [7]. This trading platform allows a prosumer to take advantage of other prosumers within its community who produce or have more energy than they need by buying energy from them at a relatively cheaper rate and vice versa.…”

A motivational game-theoretic approach for peer-to-peer energy trading in the smart grid

“…The expected benefit of such widespread deployment of DERs, however, is contingent on the extensive participation of the owners of these assets, i.e., the prosumers [4] in the electricity market. For this purpose, a number of strategies are being used at present to engage DER owners into the electricity market.…”

“…For this purpose, a number of strategies are being used at present to engage DER owners into the electricity market. Examples of such strategies include direct method [5], indirect method [4], and feed-in-tariff (FiT) [6] scheme. In the direct method, individual DER is controlled and managed by an aggregator, whereas indirect methods refer to strategies in which a central authority sends a signal to the owners to influence their consumption and generation decisions.…”

“…Otherwise, prosumers may decide to go off-grid bringing inefficient outcomes to both the grid and the prosumers [4]. Examples of such cases can be found in [8] (failure of smart meter trial, which is used in direct and indirect methods) and [9] (discontinuation of FiT).…”

“…Public solar data is collected from IEEE PES ISS website 4. Residential data was taken from the website of National Energy Efficiency Alliance (NEEA).…”