Abstract
Local electricity markets (LEMs) are investigated as a solution to provide consumers and prosumers the opportunity to have control over their electricity-related choices and make savings on their energy bills. This work analyzes market design factors, such as the number of update intervals per trading slot, the production-to-consumption (PtC) ratio, and pricing scenarios that influence the performance of an LEM. The decentralized autonomous area agent (D3A) has been used for running LEM simulations under the German regulatory framework. The results of the simulations compared using self-sufficiency, the share of market savings, and the average buying rate revealed that the performance of an LEM is highly dependent on the market design factors. Also, bidding strategy affects the performance of an LEM compared to the share of the local generation. The results imply that LEM can provide better incentives for both prosumers and consumers by providing them with the opportunity to trade their excess generation at prices higher than the feed-in tariff and lower their regular electricity tariff, respectively. With only a 20% reduction in average buying rate, it is also evident that LEMs provide a great opportunity for keeping smaller PV systems active after their 20 years of fixed remuneration under a state-sponsored incentive scheme in Germany.
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