Energy efficiency valuation in peer-to-peer electrical energy trading: A disaggregation approach

Increasing penetration of distributed energy resources has led to a shift toward a customer-centric power system structure. This decentralized and bottom-up structure aims to maximize utilization of demand-side resources, enabling win-win electrical energy exchange and benefiting both system operators and customers. As an effective driver, integrating valuation metrics for electrical energy will increase customer motivation to address the power system operational needs. Although various approaches and metrics have been introduced, they predominantly assess solely the quantity of exchanged electrical energy. Depending on the Energy Efficiency (EE) level throughout the supply chain (generation, network and consumption), the electrical energy quantity can be disaggregated into overhead (energy loss) and non-overhead (energy converted to useful work) components. Neglecting the overhead part in addition to operational challenges can lead to free riding and fairness issues. Based on the abovementioned research gap, this paper presents a novel Disaggregation-based Peer-to-Peer Energy Trading (DPET) mechanism considering EE valuation in the supply chain. Using the Alternating Direction Method of Multipliers (ADMM) in the proposed DPET, along with computational agility leads to making optimal decisions to improve supply chain electrical EE. Simulation results on the IEEE standard test system indicate more than 25% potential for reducing the overhead power on the supply chain. As a result, the share of high-efficiency electricity on the generation and consumption sides can be increased by 41% and 11%, respectively. Also, 2% improvement in the efficiency of transferred power on the network side is achievable.