P2P Multigrade Energy Trading for Heterogeneous Distributed Energy Resources and Flexible Demand

Abstract

This paper proposes a novel peer-to-peer (P2P) multi-grade energy trading design to encourage demand side flexibility to locally absorb the uncertainty of renewable distributed energy resources (DERs) in distribution networks. In particular, a reliability credit (RC) assignment method is developed for customers to differentiate the energy grades considering the heterogeneity in energy supplying reliability of DERs and the consumption preferences of customers. Later, an innovative P2P multi-grade energy trading model is introduced where different types of demand are matched up with the corresponding grades of energy. The market clearing is modeled as a social welfare maximization problem considering the net utilities of customers and the profits of DER producers. Furthermore, a fast decentralized pricing algorithm is developed that achieves the maximum of social welfare and also preserves the privacy of individual participants. To substantially improve the computational efficiency, a fast solution method is devised for customers to solve the optimal energy procurement combination problem, and closed-form solutions are derived for DER producers to allocate energy optimally. Numerical tests on a 69-node distribution feeder validate the superiority of the proposed P2P multi-grade energy trading scheme compared to the benchmark scheme. The high efficiency and scalability of the proposed fast pricing algorithm are corroborated by the simulation on the IEEE 8500-node distribution system.