Distributed Dynamic Pricing in Peer-to-Peer Transactive Energy Systems in Smart Grid

Abstract

The rapid growth of proactive consumers with distributed power generation and storage capacity, empowered by Internet of Things (IoT) devices, is transforming modern power markets into an independent, flexible, and distributed structure. In particular, the recent trend is peer-to-peer (P2P) transactive energy systems, wherein the traditional consumers became prosumers (producer+consumer) and can maximize their energy utilization by sharing with neighbors without any conventional intermediary intervention in the transactions. However, the competitive dynamic energy pricing scheme is inevitable in such systems to make the optimal decision. It is very challenging when the prosumers have limited access to the fellow prosumer’s system information (i.e., load profile, generation, and so on). This paper presents a privacy-preserving distributed dynamic pricing strategy for P2P transactive energy systems in the smart grid using Fast Alternating Direction Method of Multipliers (F-ADMM) algorithm. The result shows that the algorithm converges very fast and facilitates easy implementation. Moreover, a closed-form solution for a P2P transactive energy system was presented, which accelerate the overall computation time.