Privacy-Preserving Distributed Market Mechanism for Active Distribution Networks

TL;DR

This paper introduces a privacy-preserving distributed market mechanism for active distribution networks, leveraging secure multi-party computation and secret sharing to protect data exchange during market clearing.

Contribution

It proposes a novel secure market protocol combining distributed optimization, SMPC, and secret sharing, enhancing privacy and scalability in local electricity markets.

Findings

Successfully implemented on a 15-bus network

Ensures privacy during market clearing process

Maintains market feasibility and performance

Abstract

Amidst the worldwide efforts to decarbonize power networks, Local Electricity Markets (LEMs) in distribution networks are gaining importance due to the increased adoption of renewable energy sources and prosumers. Considering that LEMs involve data exchange among independent entities, privacy and cybersecurity are some of the main practical challenges in LEM design. This paper proposes a secure market protocol using innovations from distributed optimization and Secure MultiParty Computation (SMPC). The considered LEM is formulated as an uncertainty-aware joint market for energy and reserves with affine balancing policies. To achieve scalability and enable the use of SMPC, market clearing is solved using the Consensus ADMM algorithm. Subsequently, the data exchange among participants via ADMM iterations is protected using the Shamir secret-sharing scheme to ensure privacy. The market protocol is further reinforced by a secure and verifiable settlement process that uses SMPC and ElGamal commitments to verify market quantities and by a secure recovery scheme for missing network measurements. Finally, the feasibility and performance of the proposed LEM are evaluated on a 15-bus test network.