Peer-to-peer energy trading market considering renewable energy uncertainty and participants’ individual preferences

Abstract

With the development of renewable energy resources, peer-to-peer (P2P) energy trading is becoming more and more popular on the user side. However, the prosumers’ uncertain fluctuation and specific preference requirements have brought new challenges to the traditional market mechanism. Therefore, we propose a novel pricing mechanism, including preference marginal price (PMP), uncertainty marginal price (UMP), and local marginal price (LMP) in this paper. These pricing strategies can overcome the uncertainty problems in the current market and credit the reserve resources that ensure flexible energy delivery. We embed these pricing strategies into the robust economic dispatch model and employ a column-and-constraints generation (CCG) algorithm to solve the model. Among these prices, local marginal prices are used to charge energy consumption and financial transmission right (FTR) credits. Uncertainty marginal prices are charged for the reserve resources and financial transmission right holders. Preference marginal prices are charged from the prosumers with specific welfare requirements to credit the reserve resources, financial transmission right holders and energy producers. The market equilibrium and revenue adequacy are proven in the appendix to verify the effectiveness of the proposed pricing mechanism. In the simulation section, the total operation costs and marginal price payments increase with the rise of uncertainty level and preference requirement degree. The financial transmission right underfunding problem is verified in a three-bus system. The underfunding can be covered by congestion funds collected from uncertainty and preference marginal prices.