Large deployment of distribute energy resources and the increasing awareness of end-users towards their energy procurement are challenging current practices of electricity markets. A change of paradigm, from a top-down hierarchical approach to a more decentralized framework, has been recently researched, with market structures relying on multi-bilateral trades among market participants. In order to guarantee feasibility in power system operation, it is crucial to rethink the interaction with system operators and the way operational costs are shared in such decentralized markets. We propose here to include system operators, both at transmission and distribution level, as active actors of the market, accounting for power grid constraints and line losses. Moreover, to avoid market outcomes that discriminate agents for their geographical location, we analyze loss allocation policies and their impact on market outcomes and prices.
With an increasing share of volatile renewables, more flexibility is needed to balance the electricity system. In order to enable local flexibility, we suggest a three-stage stochastic market clearing model using community-based peer-to-peer (P2P) trading with participation in the short term reserve markets. With this approach, internal intraday (IID) and real-time (IRT) markets are cleared where peers can trade to balance their day-ahead market position under uncertainty in load and activation of reserves. Results show increased participation of 19 and 44 % in reserve markets when P2P IID and…
This paper designs a market platform for Peer-to-Peer (P2P) energy trading in Transactive Energy (TE) systems, where prosumers and consumers actively participate in the market as seller or buyer to trade energy. An auction-based approach is used for market clearing in the proposed platform and a review of different types of auction is performed. The appropriate auction approach for market clearing in the proposed platform is designed. The proposed auction mechanism is implemented in three steps namely determination, allocation and payment. This paper identifies important P2P market clearing pe…
We consider a network of prosumers involved in peer-to-peer energy exchanges, with differentiation price preferences on the trades with their neighbors, and we analyze two market designs: (i) a centralized market, used as a benchmark, where a global market operator optimizes the flows (trades) between the nodes, local demand and flexibility activation to maximize the system overall social welfare; (ii) a distributed peer-to-peer market design where prosumers in local energy communities optimize selfishly their trades, demand, and flexibility activation. We first characterizethe solution of the…
We consider a peer-to-peer electricity market, where agents hold private information that they might not want to share. The problem is modeled as a noncooperative communication game, which takes the form of a Generalized Nash Equilibrium Problem, where the agents determine their randomized reports to share with the other market players, while anticipating the form of the peer-to-peer market equilibrium. In the noncooperative game, each agent decides on the deterministic and random parts of the report, such that (a) the distance between the deterministic part of the report and the truthful priv…
In future distribution grids, prosumers (i.e., energy consumers with storage and/or production capabilities) will trade energy with each other and with the main grid. To ensure an efficient and safe operation of energy trading, in this paper, we formulate a peer-to-peer energy market of prosumers as a generalized aggregative game, in which a network operator is only responsible for the operational constraints of the system. We design a distributed market-clearing mechanism with convergence guarantee to an economically-efficient and operationally-safe configuration (i.e., a variational generali…
In this paper, we consider a network allocation problem motivated by peer-to-peer cloud storage models. The setting is that of a network of units (e.g. computers) that collaborate and offer each other space for the back up of the data of each unit. We formulate the problem as an optimization problem, we cast it into a game theoretic setting and we then propose a decentralized allocation algorithm based on the log-linear learning rule. Our main technical result is to prove the convergence of the algorithm to the optimal allocation. We also present some simulations that show the feasibility of o…
Horizontal agreements can fall within the scope of exemptions to antitrust competition if they are expected to create pro-consumer benefits. Inspired by such horizontal agreements, we introduce a cooperative game in which a set of transport operators can collectively decide at what price to offer sustainable urban mobility services to a pool of travelers. The travelers choose amongst the mobility services according to a multinomial logit model, and the operators aim at maximizing their joint profit under a constant market share constraint. After showing that various well-known allocation rules…
The growing share of proactive actors in the electricity markets calls for more attention on prosumers and more support for their decision-making under decentralized electricity markets. In view of the changing paradigm, it is crucial to study the long-term planning under the decentralized and prosumer-centric markets to unravel the effects of such markets on the planning decisions. In the first part of the two-part paper, we propose a prosumer-centric framework for concurrent generation and transmission planning. Here, three planning models are presented where a peer-to-peer market with produ…
Recent studies show that the fast growing expansion of wind power generation may lead to extremely high levels of price volatility in wholesale electricity markets. Storage technologies, regardless of their specific forms e.g. pump-storage hydro, large-scale or distributed batteries, are capable of alleviating the extreme price volatility levels due to their energy usage time shifting, fast-ramping and price arbitrage capabilities. In this paper, we propose a stochastic bi-level optimization model to find the optimal nodal storage capacities required to achieve a certain price volatility level…
Considering that the existing setup of the European electricity markets promotes the spatial coordination of neighbouring power systems only on the day-ahead market stage, regional system operators have to rely mainly on their internal balancing resources in order to guarantee system security. However, as power systems are forced to operate closer to their technical limits, where flexible generation becomes scarce, the conventional market paradigm may not be able to respond effectively on the wide range of uncertainty. The operational flexibility of the power system depends both on the technic…
The use of game theory in the design and control of large scale networked systems is becoming increasingly more important. In this paper, we follow this approach to efficiently solve a network allocation problem motivated by peer-to- peer cloud storage models as alternatives to classical centralized cloud storage services. To this aim, we propose an allocation algorithm that allows the units to use their neighbors to store a back up of their data. We prove convergence, characterize the final allocation, and corroborate our analysis with extensive numerical simulation that shows the good perfor…
In a grid constrained transactive distribution system market, distribution locational marginal pricing DLMP is influenced by the distance from the substation to an energy user, thereby causing households that are further away from the substation to be charged more. The Jain index of fairness, which has been recently applied to alleviate this undesirable effect of inefficient energy allocations, is used in this research to quantify fairness. It is shown that the Jain index is strictly quasi-concave. A bilevel distributed mechanism is proposed, where at the lower level, auction mechanisms are in…
We consider two market designs for a network of prosumers, trading energy: (i) a centralized design which acts as a benchmark, and (ii) a peer-to-peer market design. High renewable energy penetration requires that the energy market design properly handles uncertainty. To that purpose, we consider risk neutral models for market designs (i), (ii), and their risk-averse interpretations in which prosumers are endowed with coherent risk measures reflecting heterogeneity in their risk attitudes. We characterize analytically risk-neutral and risk-averse equilibrium in terms of existence and uniquenes…
Peer-to-peer (P2P) energy systems have recently emerged as a promising approach for integrating renewable and distributed energy resources into energy grids to reduce carbon emissions. However, market-clearing energy price and amounts, resulted from solving optimal P2P energy management problems, might not be satisfactory for peers/agents. This is because peers/agents in practice do not know how to set their cost function parameters when participating into P2P energy markets. To resolve such drawback, this paper proposes a novel approach, in which an inverse optimization problem is formulated …
Various peer-to-peer energy markets have emerged in recent years in an attempt to manage distributed energy resources in a more efficient way. One of the main challenges these models face is how to create and allocate incentives to participants. Cooperative game theory offers a methodology to financially reward prosumers based on their contributions made to the local energy coalition using the Shapley value, but its high computational complexity limits the size of the game. This paper explores a stratified sampling method proposed in existing literature for Shapley value estimation, and modifi…
