Distribution system resilience enhancement driven by incentive-compatible Peer-to-Peer energy market

With the decentralization of the distribution system, non-utility assets hold the potential adaptability against extreme disasters, while current distribution-level market mechanisms remain inadequate under such conditions. Instead of centralized control, this paper explores an incentive-compatible Peer-to-Peer (P2P) energy market to enhance the distribution system resilience. Firstly, a market-driven resilience enhancement strategy is proposed, where the interaction between P2P energy market and distribution system operation is formulated as a bi-level problem. Prosumers at the lower level contribute to operation schedule formulation through P2P energy trading, while the upper-level DSO issues incentive signals based on disaster simulations and ensures power flow security. Secondly, an incentive-compatible pricing and settlement mechanism based on modified distribution locational marginal price (DLMP) and Vickey-Clarke-Groves (VCG) is proposed. DLMP with scarcity price adders are calculated at the upper level to incentivize prosumers actively adapt their market roles and energy schedules in response to the system expected energy shortage. In addition, prosumers are obligated to truthfully report energy costs and demands through market settlement rules. Thirdly, we introduce the L (p)-box ADMM algorithm to address the non-convexity of the P2P trading model caused by the binary trading status variables. Meanwhile, a bi-level interaction method based on deviation penalty functions is utilized to enhance convergence. Finally, case studies show that the proposed strategy not only effectively enhances the distribution system resilience but mitigates potential market inefficiencies under extreme scenarios.