Impact of Local Energy Markets Integration in Power Systems Layer: A Comprehensive Review

Abstract

In recent years extensive research has been conducted on the development of different models that enable energy trading between prosumers and consumers due to expected high integration of distributed energy resources. Some of the most researched mechanisms include Peer-to-Peer energy trading, Community Self-Consumption and Transactive Energy Models. Here, we present an exhaustive review of existing research around Local Energy Market integration into distribution systems, in particular benefits and challenges that the power grid can expect from integrating these models. We also present a detailed overview of methods that are used to integrate physical network constraints into the market mechanisms, their advantages, drawbacks, and scaling potential. We find that financial energy transactions do not directly reflect the physical energy flows imposed by the constraints of the installed electrical infrastructure. Therefore, ensuring the stable and reliable delivery of electricity is vital to understand the impact of these transactions on the grid infrastructure, e.g., impacts on the control, operation, and planning of electricity distribution systems.

How will local energy markets influence the pan-European day-ahead market and transmission systems? A case study for local markets in France and Germany

“…Even though a wide range of literature already exist on LEMs, energy communities, and peer-to-peer trading [5,8,9], a quantitative analysis on their system impacts is yet to be performed. Previous work has mainly been concerned with the integration of LEMs into the distribution grid and less focused on the wholesale and transmission system [10,11].…”

“…However, no pan-European simulation of wholesale markets and grid calculations have been carried out in these studies. In general, quantitative studies on the impact of LEMs on transmission systems are not yet widely researched [10]. First studies on system impacts of regional trading have been carried out in [15] as part of the research project C/sells.…”

“…This term is normalized by the term E T otal i that is the sum of the annual local electricity demand E Demand i and the annual sales to the wholesale market E SaleCentral i defined in Eq. (10). With this normalization term E T otal i both areas with generation surplus and areas with demand surplus can be compared.…”

Hosting a community‐based local electricity market in a residential network

“…Authors in Ref. [17][18][19] have looked into the different techniques of incorporating physical network constraints in the study of LEM. Network constraints can be included in the market formulation as AC branch flow equations [20,21], or linearised DC approximation [22,23].…”

Peer-to-peer energy trading optimization in energy communities using multi-agent deep reinforcement learning

“…TE systems can also enable the administration of peer-to-peer (P2P) trading and local energy markets (LEM) in smart grids by employing devices with their own objectives and decision-making capabilities. A LEM can be used in a close community of prosumers and consumers which share a market platform for trading locally produced energy (Dudjak et al 2021).…”