Grid Influenced Peer-to-Peer Energy Trading

TL;DR

This paper introduces a Stackelberg game-based peer-to-peer energy trading scheme that incentivizes prosumers to reduce peak demand, ensuring a stable equilibrium and demonstrating its effectiveness through numerical case studies.

Contribution

It develops a novel Stackelberg game model for P2P energy trading with a closed-form solution and proves the stability and uniqueness of the equilibrium.

Findings

The game has a unique and stable Stackelberg equilibrium.

Proposed algorithm effectively reaches the equilibrium.

Numerical case studies validate the scheme's benefits.

Abstract

This paper proposes a peer-to-peer energy trading scheme that can help the centralized power system to reduce the total electricity demand of its customers at the peak hour. To do so, a cooperative Stackelberg game is formulated, in which the centralized power system acts as the leader that needs to decide on a price at the peak demand period to incentivize prosumers to not seeking any energy from it. The prosumers, on the other hand, act as followers and respond to the leader's decision by forming suitable coalitions with neighboring prosumers in order to participate in P2P energy trading to meet their energy demand. The properties of the proposed Stackelberg game are studied. It is shown that the game has a unique and stable Stackelberg equilibrium, as a result of the stability of prosumers' coalitions. At the equilibrium, the leader chooses its strategy using a derived closed-form expression, while the prosumers choose their equilibrium coalition structure. An algorithm is proposed that enables the centralized power system and the prosumers to reach the equilibrium solution. Numerical case studies demonstrate the beneficial properties of the proposed scheme.