Peer-to-Peer Energy Trading in Smart Grids Considering Network Utilization Fees

Abstract

Peer-to-peer (P2P) energy trading is one of the promising approaches for implementing decentralized electricity market paradigms. In the P2P approach, each actor negotiates directly with a set of trading partners. Grid-related costs always occur during each P2P transaction. A proper market clearing mechanism is necessary to facilitate energy transactions among different parties. This paper proposes a decentralized market clearing mechanism for P2P energy trading, considering the privacy of the agents as well as utilization fees for using the third party owned network. Grid-related costs in P2P energy trading are considered by calculating network utilization fees using an electrical distance approach. The simulation results are presented to verify the effectiveness of the proposed approach.