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An iterative uniform-price auction mechanism for peer-to-peer energy trading in a community microgrid

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  • Xu, Shuang
  • Zhao, Yong
  • Li, Yuanzheng
  • Zhou, Yue

Abstract

With the rapid deployment of distributed photovoltaic (PV) systems in residential buildings, peer-to-peer (P2P) energy trading in a community microgrid is highly desired since it enables flexible and economical energy transactions among neighboring prosumers. An efficient trading mechanism is pivotal for the successful and sustainable implementation of P2P energy trading in a community microgrid. This paper proposes a novel iterative uniform-price auction (IUPA) mechanism. Depending on the comparison between the aggregated energy supply and demand, the P2P market is divided into the seller’s market and the buyer’s market. The proposed auction mechanism is respectively implemented in the two types of markets in order to determine a uniform trading price and an efficient energy allocation. To maximize economic benefits, competitive prosumers iteratively adjust their bids based on their own private information and the issued market information until reaching a state of Nash equilibrium. This differs from the continuous double auction (CDA) in terms of bidding formats and prosumers’ trading strategies. Besides, the auction market self-adaption algorithm (AMSA) is designed for efficiently finding the equilibrium of the IUPA. Numerical studies demonstrate the effectiveness of the proposed mechanism in terms of finding fairer trading prices, saving total costs of the community, and promoting local transactions of excess PV energy.

Suggested Citation

  • 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).
    • Handle: RePEc:eee:appene:v:298:y:2021:i:c:s0306261921005390
    DOI: 10.1016/j.apenergy.2021.117088
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    Cited by:

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    2. Liaqat Ali & M. Imran Azim & Nabin B. Ojha & Jan Peters & Vivek Bhandari & Anand Menon & Vinod Tiwari & Jemma Green & S.M. Muyeen, 2023. "Balancing Usage Profiles and Benefitting End Users through Blockchain Based Local Energy Trading: A German Case Study," Energies, MDPI, vol. 16(17), pages 1-18, August.
    3. Younes Zahraoui & Tarmo Korõtko & Argo Rosin & Hannes Agabus, 2023. "Market Mechanisms and Trading in Microgrid Local Electricity Markets: A Comprehensive Review," Energies, MDPI, vol. 16(5), pages 1-52, February.
    4. Leila Luttenberger Marić & Hrvoje Keko & Marko Delimar, 2022. "The Role of Local Aggregator in Delivering Energy Savings to Household Consumers," Energies, MDPI, vol. 15(8), pages 1-27, April.
    5. Arnob Das & Susmita Datta Peu & Md. Abdul Mannan Akanda & Abu Reza Md. Towfiqul Islam, 2023. "Peer-to-Peer Energy Trading Pricing Mechanisms: Towards a Comprehensive Analysis of Energy and Network Service Pricing (NSP) Mechanisms to Get Sustainable Enviro-Economical Energy Sector," Energies, MDPI, vol. 16(5), pages 1-27, February.
    6. Heilmann, Jakob & Wensaas, Marthe & Crespo del Granado, Pedro & Hashemipour, Naser, 2022. "Trading algorithms to represent the wholesale market of energy communities in Norway and England," Renewable Energy, Elsevier, vol. 200(C), pages 1426-1437.
    7. Helder Pereira & Bruno Ribeiro & Luis Gomes & Zita Vale, 2022. "Smart Grid Ecosystem Modeling Using a Novel Framework for Heterogenous Agent Communities," Sustainability, MDPI, vol. 14(23), pages 1-20, November.
    8. 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).
    9. 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).
    10. Boiarkin, Veniamin & Rajarajan, Muttukrishnan & Al-Zaili, Jafar & Asif, Waqar, 2023. "A novel dynamic pricing model for a microgrid of prosumers with photovoltaic systems," Applied Energy, Elsevier, vol. 342(C).
    11. Li, Junkai & Ge, Shaoyun & Xu, Zhengyang & Liu, Hong & Li, Jifeng & Wang, Chengshan & Cheng, Xueying, 2023. "A network-secure peer-to-peer trading framework for electricity-carbon integrated market among local prosumers," Applied Energy, Elsevier, vol. 335(C).
    12. Luis Gomes & Hugo Morais & Calvin Gonçalves & Eduardo Gomes & Lucas Pereira & Zita Vale, 2022. "Impact of Forecasting Models Errors in a Peer-to-Peer Energy Sharing Market," Energies, MDPI, vol. 15(10), pages 1-18, May.

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