Energy Peer-to-Peer Trading in Virtual Microgrids in Smart Grids: A Game-Theoretic Approach

Abstract

In the UK, non-commodity charges account for 55-65% of energy bills [1] and network charges alone account for about 25% of that figure [2]. Peer-to-peer (P2P) energy trading offers a unique approach to produce and sell energy at the edge of the network and can help in reducing such charges. When these prosumers are coordinated using communication systems [3], [4], significant power network values could be achieved including reduced pollution and, increased energy network efficiency and security [5].Reliable communication systems play vital roles in smart grids [3], [6]. For example, communication infrastructure can be leveraged to regroup prosumers into logical clusters called virtual microgrids (VMGs) in order to improve performance and aid network management cost reduction [3], [4], [7].

Automated peer-to-peer negotiation for energy contract settlements in residential cooperatives

“…For instance, a coalitional game theory based approach is proposed to encourage sustainable prosumer participation in P2P energy trading is proposed in [23]. In [24], the author optimise the social benefit of prosumers in a Virtual microgrid setting when the prosumers are exposed to different roles -producers and consumers, and analyse the allocation through Stackleberg game. The importance of applying P2P energy trading further highlighted by a concept of Federated (virtual) power plant [25], where the P2P trading encourages prosumers to form the power plant -through coalitions -and consequently realising the prosumers values to power system value-chain.…”

Federating Smart Cluster Energy Grids for Peer-to-Peer Energy Sharing and Trading

“…As reported by related studies, the P2P energy trading can be facilitated using different types of algorithms. For example, the Stackelberg equilibrium game was used in [64]- [67] to optimise the energy cost and social benefit in P2P energy system; a game theory approach was developed in [32], [68]- [71] to optimise energy use and maximise energy incomes for P2P energy prosumers. Harish et al [72] proposed a nonlinear optimisation problem to minimise energy costs and losses during transmission while Long et al [73] developed a linear programming problem to maximise the local balance between participants.…”

A transactive energy management system for future community needs

“…In real applications, the owner of the grid collects the network utilization fees, paid by consumers corresponding to its network usage during energy transactions, to cover these costs. In traditional electricity markets, such network fees constitute a significant portion of the energy bills of consumers [148].…”

“…The distribution network operator manages ancillary services in the network during P2P energy transactions. A P2P energy trading in virtual microgrids with heterogeneous prosumers is proposed in [148], where interactions among the prosumers are modeled as a non-cooperative game.…”

“…In these works [26,49,125,126,132,135,148,150,151], different approaches for P2P energy trading are studied considering the economic aspect for increasing welfare or decreasing the cost of agents. However, the grid-related costs of using the third party owned network for power distribution as well as power losses in P2P energy transactions are not considered.…”