A peer-to-peer energy trading market framework for single buyer model: An integration of decentralised finance instruments and cooperative game model

Abstract

Single Buyer (SB) model has gained traction in many Southeast Asia, Middle Eastern, and North African countries for its blend of centralisation and controlled competition. The semi-liberalised regulatory environment has hindered the integration of cogeneration or combined heat and power (CHP) as a prosumer within the electricity value chain, despite its pivotal role in enhancing energy efficiency. There is a disconnection in the existing literature as electric supply configurations and enablement of peer-to-peer (P2P) electricity trading are individually studied. There also lacks the studies addressing electricity as a special commodity and its compatibility with the market. This paper bridges the research gaps by proposing a P2P energy trading market framework that integrates decentralised finance (DeFi) instruments and a cooperative game model. Malaysia, which implements the SB model in its electric supply structure, is selected for a case study. The comprehensive framework develops (1) a stableswap hybrid function automated market maker (HFMM) decentralised exchange (DEX) for P2P trading, (2) a mixed-integer linear programming (MILP) optimisation model to determine the optimal operational strategy with minimised total annualised cost (TAC) of the system, and (3) an allocation scheme based on a cooperative game model to gauge the individual and coalitional cost savings allocations. Overall, this study presents a novel approach to addressing the challenges with innovating the SB model, while also fostering competitions among prosumers. The SB structure of Malaysia is briefly inspected, and the proposed framework is expected to contribute to the growth of macro-level CHP integration in the nation's energy planning.