Transforming Energy Networks via Peer to Peer Energy Trading: Potential of Game Theoretic Approaches

TL;DR

This paper reviews how game theoretic approaches can effectively model and facilitate peer-to-peer energy trading in smart grids, addressing decision-making conflicts and promoting cooperation among prosumers.

Contribution

It systematically classifies and discusses various game and auction theoretic models applied to P2P energy trading, highlighting recent developments and key findings.

Findings

Game theory models improve decision-making in P2P energy trading

Auction approaches facilitate efficient energy allocation

Recent models demonstrate increased prosumer cooperation

Abstract

Peer-to-peer (P2P) energy trading has emerged as a next-generation energy management mechanism for the smart grid that enables each prosumer of the network to participate in energy trading with one another and the grid. This poses a significant challenge in terms of modeling the decision-making process of each participant with conflicting interest and motivating prosumers to participate in energy trading and to cooperate, if necessary, for achieving different energy management goals. Therefore, such decision-making process needs to be built on solid mathematical and signal processing tools that can ensure an efficient operation of the smart grid. This paper provides an overview of the use of game theoretic approaches for P2P energy trading as a feasible and effective means of energy management. As such, we discuss various games and auction theoretic approaches by following a systematic classification to provide information on the importance of game theory for smart energy research. Then, the paper focuses on the P2P energy trading describing its key features and giving an introduction to an existing P2P testbed. Further, the paper zooms into the detail of some specific game and auction theoretic models that have recently been used in P2P energy trading and discusses some important finding of these schemes.