Peer-to-Peer Energy Markets With Uniform Pricing: A Dynamic Operating Envelope Approach

TL;DR

This paper proposes a novel peer-to-peer energy market framework with uniform pricing enabled by dynamic operating envelopes, ensuring fairness and grid constraint compliance in prosumer energy trading.

Contribution

It introduces a dynamic operating envelope approach to decompose grid constraints, facilitating uniform pricing in peer-to-peer energy markets with prosumers.

Findings

Market simulations show effective constraint management.

Uniform pricing is achievable with the proposed DOE method.

Benchmarking demonstrates the approach's practicality.

Abstract

The recent widespread adoption of rooftop solar backed by battery storage is enabling energy customers to both produce and consume electricity (i.e., prosumers of electricity). To facilitate prosumer participation in the electric grid, new market mechanisms are required. In this paper, we design peer-to-peer energy markets where prosumers trade their excess energy with peers to gain profit while satisfying the overall balance in electricity supply and demand. We first consider a market structure, considering the case where voltage and/or thermal constraints are binding. When such grid constraints are binding, market clearing prices can vary across locations. However, heterogeneous prices may be considered by regulators to lack fairness. To ensure uniform pricing, we design two peer-to-peer energy markets with dynamic operating envelopes (DOEs). DOEs enable us to decompose global voltage and thermal constraints across the power grid into local constraints for each prosumer, resulting in uniform prices across the grid. By means of numerical simulations on an IEEE 13-node feeder, we benchmark the proposed market-based approaches in the presence of binding voltage constraints.