Evaluation of the Effects of Bidding Strategy with Customized Pricing on the Individual Prosumer in a Local Energy Market

Abstract

Peer-to-peer (P2P) energy trading is a mechanism that allows people to share locally the energy they have generated from distributed renewable resources (DER), to generate profit form the unused resources and to reduce the cost for electricity for the household and in the community itself. This calls for the design of new energy markets, accompanied with the development of comprehensive exchange strategies, which reflect both the consumer?s preferences and the heterogeneity of the renewable sources. The paper presents a study of the behavior patterns of individual prosumers using bidding strategies based on the State-of-Charge of the battery and two different pricing algorithm, one with fixed prices and one based on the battery price of each standalone system as well as the effect such patterns have on a local energy market with solar panels, fuels cells and batteries. The evaluation is achieved by the use of a prototype based on the Open Energy Systems (OES), a community in Okinawa, Japan, made of 19 interconnected houses with residential storage, photovoltaic cells and AC grid connection. In order to simulate heterogeneity, a fuel cell, modeled after Ene-Farm, is added to the original configuration. Each house has a power flow management system, which uses a priority-based algorithm to maintain demand-response efficiency, capable of scheduling the operating hours of the available fuels cells. The energy market is based on Zaraba, a continuous double auction algorithm used by the Japanese Stock Exchange, in which prosumer can bid for a desired amount and price of electricity for a 30-minutes time slot in the future The preliminary numerical evaluation is based on the results from several simulations using different versions of the bidding agent.

Social and Economic Value in Emerging Decentralized Energy Business Models: A Critical Review

“…In the Quartierstrom trial in Switzerland, the self-sufficiency rate (SSR), or the proportion of energy demand met by the prosumers consuming their own energy, increased with P2P trading to 16.3%, compared to 15.5% in a scenario without trading [32]. Increased autarky was also achieved in a demonstration in Japan, a bidding strategy based on the current price of the electricity stored in the battery of each standalone system allowed those with medium or low consumption levels to be self-sufficient by making better use of their self-generated energy [33].…”

“…The trial in Japan demonstrated that, compared to a P2P bidding strategy with fixed prices, a bidding strategy based on the current price of the electricity stored in the battery of each standalone system resulted in 55% fewer deals due to fewer available matches in the preferred price range of participants and, in turn, a predictable pattern of stable peaks that indicate higher prices in comparison with the case of fixed pricing. However, the increased utilization of self-generated electricity achieved with the bidding strategy resulted in a 10% decrease in energy spending in households with high levels of consumption, and 7% decrease in medium and low consumption households of average daily consumption of more than 100 watts [33]. Other, less direct economic benefits can also follow, e.g., in India, local businesses benefit from being able to run larger loads [31].…”

An Ecosystem View of Peer-to-Peer Electricity Trading: Scenario Building by Business Model Matrix to Identify New Roles

“…End customer value − Autarky, self-sufficiency, or independence of energy supply [11][12][13][14][15][16][17] − Autonomy [11,15,[18][19][20][21][22][23] − Green energy [13,15,24] − Lower electricity costs [22][23][24][25][26] − Positive attitude to regionality [13,19,20,22,23] − Sense of community identity [27] − Intangible returns (built upon the notion of togetherness, friendship, love, solidarity, and different ways of bonding with others) [28,29] − Responsibility to future generation [15] − Sustainable lifestyle [21] − Desire for greater agency (active participation) in the energy transition [13,21,30,31] − Social comparison [13,15,30] − Perceived importance of shared generation and consumption and easy implementation [20] Business value − Make electricity less expensive, including making renewable energy more profitable and "supporting new and better mechanisms for return-on-investment beyond government subsidies" [13,[21]…”

“…Finally, there are the Energy Services Companies (ESCs) [75][76][77], an increasing category of companies offering their consultancy in electricity supply to the public [14].…”

Automated Negotiation for Peer-to-Peer Electricity Trading in Local Energy Markets

“…Optimization of electricity production and consumption schedule in a wholesale market where buyer and seller agents cooperate to determine the best energy contract, is one of such developmental research frameworks [42,43]. Current research also focuses on bilateral contract networks between suppliers and centralized producers [44]; computational properties of negotiation algorithms [45]; prosumers' behavioural pattern based on their bidding strategy [46]; optimized scheduling of energy storage for a P2P microgrid model using automated negotiations [47]; as well as enabling communication technologies [48]. Furthermore, agent-coordinated electricity trading between homes in a cooperative residential setting has been shown to lead to an overall battery capacity reduction and reduced energy losses [49,50].…”