Pricing mechanisms for peer-to-peer energy trading: Towards an integrated understanding of energy and network service pricing mechanisms

Abstract

This paper presents a review and analysis of pricing strategies in peer-to-peer (P2P) energy trading to provide new insights into the design of pricing mechanisms and the establishment of sustainable and effective P2P energy markets in distribution networks. P2P energy trading is emerging as an effective management scheme for prosumers with renewable energy sources in distribution networks. Several studies have focused on designing pricing mechanisms for P2P energy trading with a focus on energy pricing but not on network service pricing. To understand the extant pricing mechanisms, 169 papers were systematically reviewed. These papers, published between 2015 and 2022, were retrieved by academic search engines. The review showed that energy pricing can be categorized into synchronous and asynchronous, while network service pricing can be classified into ex-ante and ex-post schemes. Synchronous energy pricing provides economic efficiency. Asynchronous energy pricing offers Pareto optimality and price transparency and accommodates market participant preferences. Market participation can be reduced by conflicts of interest in network service pricing, between system operators and market participants owing to the settlement of network service costs, and among participants due to pricing methods. Energy and network service pricing compatibility between different methodologies relies on market results to distinguish matched counterparties.