A fair and effective approach to managing distributed energy resources through peer-to-peer energy trading with load prioritization among smart homes

Abstract

This paper proposes a novel approach to effectively manage distributed energy resources (DERs) by facilitating peer-to-peer (P2P) energy trading among smart homes. This system incentivizes peers to trade surplus energy, thereby maximizing social welfare. The proposed day-ahead demand-side management (DSM) technique considers load prioritization based on individual user needs. It employs an optimal energy allocation policy that encourages peers to purchase energy at reduced rates while selling it at advantageous prices. This strategy optimizes the allocation of traded energy to higher-priority loads, followed by lower-priority ones, all while considering user preferences. The proposed method results in an average reduction in energy costs from 14.80 % to 2.70 % for all consumers and an average increase in revenues from 17.35 % to 9.07 % for all prosumers compared to the grid and previously proposed studies. Moreover, the proposed approach significantly enhances the consumer satisfaction Index (SI), with a 46.8 % increase over the previous research study. Simulation results demonstrate substantial economic benefits for all market participants, improved SI, enhanced community self-sufficiency, and reduced dependence on the main grid. The proposed methodology offers a practical and fair solution for managing DERs through P2P energy trading by implementing load prioritization within smart homes. It highlights the potential to establish a sustainable and efficient energy ecosystem, thereby enhancing the effective utilization of surplus energy from DERs.