Optimal Network Charge for Peer-to-Peer Energy Trading: A Grid Perspective

TL;DR

This paper proposes an optimal network charge mechanism for integrating peer-to-peer energy trading into power grids, balancing grid constraints and prosumer benefits through a Stackelberg game approach.

Contribution

It introduces a bi-level optimization model and a conversion method to efficiently determine optimal network charges for P2P energy trading.

Findings

Optimal network charge benefits both grid operators and prosumers.

The proposed method efficiently computes charges for large prosumer groups.

Energy storage increases prosumer sensitivity to network charges.

Abstract

Peer-to-peer (P2P) energy trading is a promising market scheme to accommodate the increasing distributed energy resources (DERs). However, how P2P to be integrated into the existing power systems remains to be investigated. In this paper, we apply network charge as a means for the grid operator to attribute transmission loss and ensure network constraints for empowering P2P transaction. The interaction between the grid operator and the prosumers is modeled as a Stackelberg game, which yields a bi-level optimization problem. We prove that the Stackelberg game admits an equilibrium network charge price. Besides, we propose a method to obtain the network charge price by converting the bi-level optimization into a single-level mixed-integer quadratic programming (MIQP), which can handle a reasonable scale of prosumers efficiently. Simulations on the IEEE bus systems show that the proposed optimal network charge is favorable as it can benefit both the grid operator and the prosumers for empowering the P2P market, and achieves near-optimal social welfare. Moreover, the results show that the presence of energy storage will make the prosumers more sensitive to the network charge price changes.