IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v295y2021ics0306261921004967.html
   My bibliography  Save this article

Two-stage mechanism design for energy trading of strategic agents in energy communities

Author

Listed:
  • Khorasany, Mohsen
  • Razzaghi, Reza
  • Shokri Gazafroudi, Amin

Abstract

This paper proposes a mechanism design for energy trading in energy communities. Each community member is modeled as a strategic agent making strategic actions in interaction with other agents. The proposed mechanism includes two stages, in which in the first stage agents iteratively bid in a day-ahead market, and schedule their energy profiles for the whole operation horizon. Then, in the second stage, agents participate in a one-shot auction for energy trading in each time slot. The two-stage design allows agents to reduce their energy costs by having access to better prices in ahead markets, and also, by granting agents the ability to adjust their bids near real-time, based on their updated demand/generation profile. It is shown that, under mild assumptions on bidding of agents in stage two, the proposed mechanism is Bayes–Nash incentive compatible. Moreover, it is proven that the mechanism is ex-post budget balanced, and individually rational. Case studies demonstrate that the proposed mechanism can reduce the energy costs of the community and helps to reduce the reliance of the community on upstream networks.

Suggested Citation

  • Khorasany, Mohsen & Razzaghi, Reza & Shokri Gazafroudi, Amin, 2021. "Two-stage mechanism design for energy trading of strategic agents in energy communities," Applied Energy, Elsevier, vol. 295(C).
    • Handle: RePEc:eee:appene:v:295:y:2021:i:c:s0306261921004967
    DOI: 10.1016/j.apenergy.2021.117036
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261921004967
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2021.117036?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Nisan, Noam & Ronen, Amir, 2001. "Algorithmic Mechanism Design," Games and Economic Behavior, Elsevier, vol. 35(1-2), pages 166-196, April.
    2. Tushar, Wayes & Yuen, Chau & Saha, Tapan K. & Morstyn, Thomas & Chapman, Archie C. & Alam, M. Jan E. & Hanif, Sarmad & Poor, H. Vincent, 2021. "Peer-to-peer energy systems for connected communities: A review of recent advances and emerging challenges," Applied Energy, Elsevier, vol. 282(PA).
    3. Wang, Jianxiao & Zhong, Haiwang & Wu, Chenye & Du, Ershun & Xia, Qing & Kang, Chongqing, 2019. "Incentivizing distributed energy resource aggregation in energy and capacity markets: An energy sharing scheme and mechanism design," Applied Energy, Elsevier, vol. 252(C), pages 1-1.
    4. Zhang, Chenghua & Wu, Jianzhong & Zhou, Yue & Cheng, Meng & Long, Chao, 2018. "Peer-to-Peer energy trading in a Microgrid," Applied Energy, Elsevier, vol. 220(C), pages 1-12.
    5. Yohwan Choi & Hongseok Kim, 2016. "Optimal Scheduling of Energy Storage System for Self-Sustainable Base Station Operation Considering Battery Wear-Out Cost," Energies, MDPI, vol. 9(6), pages 1-19, June.
    6. Mengelkamp, Esther & Gärttner, Johannes & Rock, Kerstin & Kessler, Scott & Orsini, Lawrence & Weinhardt, Christof, 2018. "Designing microgrid energy markets," Applied Energy, Elsevier, vol. 210(C), pages 870-880.
    7. Han, Sekyung & Han, Soohee & Aki, Hirohisa, 2014. "A practical battery wear model for electric vehicle charging applications," Applied Energy, Elsevier, vol. 113(C), pages 1100-1108.
    8. Long, Chao & Wu, Jianzhong & Zhou, Yue & Jenkins, Nick, 2018. "Peer-to-peer energy sharing through a two-stage aggregated battery control in a community Microgrid," Applied Energy, Elsevier, vol. 226(C), pages 261-276.
    9. Tushar, Wayes & Saha, Tapan Kumar & Yuen, Chau & Morstyn, Thomas & McCulloch, Malcolm D. & Poor, H. Vincent & Wood, Kristin L., 2019. "A motivational game-theoretic approach for peer-to-peer energy trading in the smart grid," Applied Energy, Elsevier, vol. 243(C), pages 10-20.
    10. Mitridati, Lesia & Kazempour, Jalal & Pinson, Pierre, 2021. "Design and game-Theoretic analysis of community-Based market mechanisms in heat and electricity systems," Omega, Elsevier, vol. 99(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Khorasany, Mohsen & Shokri Gazafroudi, Amin & Razzaghi, Reza & Morstyn, Thomas & Shafie-khah, Miadreza, 2022. "A framework for participation of prosumers in peer-to-peer energy trading and flexibility markets," Applied Energy, Elsevier, vol. 314(C).
    2. Fioriti, Davide & Frangioni, Antonio & Poli, Davide, 2021. "Optimal sizing of energy communities with fair revenue sharing and exit clauses: Value, role and business model of aggregators and users," Applied Energy, Elsevier, vol. 299(C).
    3. Zade, Michel & Lumpp, Sebastian Dirk & Tzscheutschler, Peter & Wagner, Ulrich, 2022. "Satisfying user preferences in community-based local energy markets — Auction-based clearing approaches," Applied Energy, Elsevier, vol. 306(PA).
    4. Mohammad Hossein Nejati Amiri & Mehdi Mehdinejad & Amin Mohammadpour Shotorbani & Heidarali Shayanfar, 2023. "Heuristic Retailer’s Day-Ahead Pricing Based on Online-Learning of Prosumer’s Optimal Energy Management Model," Energies, MDPI, vol. 16(3), pages 1-21, January.
    5. Gazafroudi, Amin Shokri & Khorasany, Mohsen & Razzaghi, Reza & Laaksonen, Hannu & Shafie-khah, Miadreza, 2021. "Hierarchical approach for coordinating energy and flexibility trading in local energy markets," Applied Energy, Elsevier, vol. 302(C).
    6. Simoiu, Mircea Stefan & Fagarasan, Ioana & Ploix, Stéphane & Calofir, Vasile, 2022. "Modeling the energy community members’ willingness to change their behaviour with multi-agent systems: A stochastic approach," Renewable Energy, Elsevier, vol. 194(C), pages 1233-1246.
    7. Zabihinia Gerdroodbari, Yasin & Khorasany, Mohsen & Razzaghi, Reza, 2022. "Dynamic PQ Operating Envelopes for prosumers in distribution networks," Applied Energy, Elsevier, vol. 325(C).
    8. Wanessa Guedes & Lucas Deotti & Bruno Dias & Tiago Soares & Leonardo Willer de Oliveira, 2022. "Community Energy Markets with Battery Energy Storage Systems: A General Modeling with Applications," Energies, MDPI, vol. 15(20), pages 1-22, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hu, Qian & Zhu, Ziqing & Bu, Siqi & Wing Chan, Ka & Li, Fangxing, 2021. "A multi-market nanogrid P2P energy and ancillary service trading paradigm: Mechanisms and implementations," Applied Energy, Elsevier, vol. 293(C).
    2. Siripha Junlakarn & Phimsupha Kokchang & Kulyos Audomvongseree, 2022. "Drivers and Challenges of Peer-to-Peer Energy Trading Development in Thailand," Energies, MDPI, vol. 15(3), pages 1-25, February.
    3. Azim, M. Imran & Tushar, Wayes & Saha, Tapan K. & Yuen, Chau & Smith, David, 2022. "Peer-to-peer kilowatt and negawatt trading: A review of challenges and recent advances in distribution networks," Renewable and Sustainable Energy Reviews, Elsevier, vol. 169(C).
    4. Zheng, Boshen & Wei, Wei & Chen, Yue & Wu, Qiuwei & Mei, Shengwei, 2022. "A peer-to-peer energy trading market embedded with residential shared energy storage units," Applied Energy, Elsevier, vol. 308(C).
    5. Tushar, Wayes & Yuen, Chau & Saha, Tapan K. & Morstyn, Thomas & Chapman, Archie C. & Alam, M. Jan E. & Hanif, Sarmad & Poor, H. Vincent, 2021. "Peer-to-peer energy systems for connected communities: A review of recent advances and emerging challenges," Applied Energy, Elsevier, vol. 282(PA).
    6. Tushar, Wayes & Saha, Tapan Kumar & Yuen, Chau & Azim, M. Imran & Morstyn, Thomas & Poor, H. Vincent & Niyato, Dustin & Bean, Richard, 2020. "A coalition formation game framework for peer-to-peer energy trading," Applied Energy, Elsevier, vol. 261(C).
    7. Esmat, Ayman & de Vos, Martijn & Ghiassi-Farrokhfal, Yashar & Palensky, Peter & Epema, Dick, 2021. "A novel decentralized platform for peer-to-peer energy trading market with blockchain technology," Applied Energy, Elsevier, vol. 282(PA).
    8. Filipe Bandeiras & Álvaro Gomes & Mário Gomes & Paulo Coelho, 2023. "Exploring Energy Trading Markets in Smart Grid and Microgrid Systems and Their Implications for Sustainability in Smart Cities," Energies, MDPI, vol. 16(2), pages 1-41, January.
    9. Xu, Shuang & Zhao, Yong & Li, Yuanzheng & Zhou, Yue, 2021. "An iterative uniform-price auction mechanism for peer-to-peer energy trading in a community microgrid," Applied Energy, Elsevier, vol. 298(C).
    10. Zhou, Yue & Wu, Jianzhong & Song, Guanyu & Long, Chao, 2020. "Framework design and optimal bidding strategy for ancillary service provision from a peer-to-peer energy trading community," Applied Energy, Elsevier, vol. 278(C).
    11. Karami, Mahdi & Madlener, Reinhard, 2022. "Business models for peer-to-peer energy trading in Germany based on households’ beliefs and preferences," Applied Energy, Elsevier, vol. 306(PB).
    12. Dynge, Marthe Fogstad & Crespo del Granado, Pedro & Hashemipour, Naser & Korpås, Magnus, 2021. "Impact of local electricity markets and peer-to-peer trading on low-voltage grid operations," Applied Energy, Elsevier, vol. 301(C).
    13. He, Li & Liu, Yuanzhi & Zhang, Jie, 2021. "Peer-to-peer energy sharing with battery storage: Energy pawn in the smart grid," Applied Energy, Elsevier, vol. 297(C).
    14. Meritxell Domènech Monfort & César De Jesús & Natapon Wanapinit & Niklas Hartmann, 2022. "A Review of Peer-to-Peer Energy Trading with Standard Terminology Proposal and a Techno-Economic Characterisation Matrix," Energies, MDPI, vol. 15(23), pages 1-29, November.
    15. Azim, M. Imran & Tushar, Wayes & Saha, Tapan K., 2021. "Cooperative negawatt P2P energy trading for low-voltage distribution networks," Applied Energy, Elsevier, vol. 299(C).
    16. Kirchhoff, Hannes & Strunz, Kai, 2019. "Key drivers for successful development of peer-to-peer microgrids for swarm electrification," Applied Energy, Elsevier, vol. 244(C), pages 46-62.
    17. Lyu, Cheng & Jia, Youwei & Xu, Zhao, 2021. "Fully decentralized peer-to-peer energy sharing framework for smart buildings with local battery system and aggregated electric vehicles," Applied Energy, Elsevier, vol. 299(C).
    18. Chen, Yang & Park, Byungkwon & Kou, Xiao & Hu, Mengqi & Dong, Jin & Li, Fangxing & Amasyali, Kadir & Olama, Mohammed, 2020. "A comparison study on trading behavior and profit distribution in local energy transaction games," Applied Energy, Elsevier, vol. 280(C).
    19. García-Muñoz, Fernando & Dávila, Sebastián & Quezada, Franco, 2023. "A Benders decomposition approach for solving a two-stage local energy market problem under uncertainty," Applied Energy, Elsevier, vol. 329(C).
    20. Vinyals, Meritxell, 2021. "Scalable multi-agent local energy trading — Meeting regulatory compliance and validation in the Cardiff grid," Applied Energy, Elsevier, vol. 298(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:295:y:2021:i:c:s0306261921004967. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.