Prosumers and retailers based decentralized energy trading model in the smart grid considering network constraints

Abstract

The rapid integration of renewable energy sources and evolving consumer demands have transformed traditional electrical markets into prosumer-centric markets. In a prosumer-centric economy, prosumers exchange energy with one another on a peer-to-peer (P2P) basis. To emphasize P2P transactions, this study presents a decentralized P2P energy trading framework for direct interaction between market players such as prosumers and retailers in the community. Retailers are profit-based companies that are able to generate energy. They can also trade their energy with prosumers and the grid. The designed model respects the market participant’s preferences and gives them more options for energy transactions. Energy transactions between participants are transported through electrical networks. Hence, network constraints such as power losses and network access charges are considered in the presented model. The primary objective of the proposed model is to maximize the social welfare of the participants integrated with the network constraints. The performance of the developed model is evaluated on an IEEE 14-bus system. The simulation results ensure the efficient and global optimal solution with limited information flow between market participants.

Keywords

• Decentralized energy market
• Network constraints
• Peer-to-peer energy trading
• Product differentiation
• Smart grid