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

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.Comment: 38 pages, single column, double spac

Cooperatives for demand side management

We propose a new scheme for efficient demand side management for the Smart Grid. Specifically, we envisage and promote the formation of cooperatives of medium-large consumers and equip them (via our proposed mechanisms) with the capability of regularly participating in the existing electricity markets by providing electricity demand reduction services to the Grid. Based on mechanism design principles, we develop a model for such cooperatives by designing methods for estimating suitable reduction amounts, placing bids in the market and redistributing the obtained revenue amongst the member agents. Our mechanism is such that the member agents have no incentive to show artificial reductions with the aim of increasing their revenue

Energy Management for a User Interactive Smart Community: A Stackelberg Game Approach

This paper studies a three party energy management problem in a user interactive smart community that consists of a large number of residential units (RUs) with distributed energy resources (DERs), a shared facility controller (SFC) and the main grid. A Stackelberg game is formulated to benefit both the SFC and RUs, in terms of incurred cost and achieved utility respectively, from their energy trading with each other and the grid. The properties of the game are studied and it is shown that there exists a unique Stackelberg equilibrium (SE). A novel algorithm is proposed that can be implemented in a distributed fashion by both RUs and the SFC to reach the SE. The convergence of the algorithm is also proven, and shown to always reach the SE. Numerical examples are used to assess the properties and effectiveness of the proposed scheme.Comment: 6 pages, 4 figure

Blockchain electricity trading using tokenised power delivery contracts. ESRI Working Paper No. 649 December 2019

This paper proposes a new mechanism for forward selling renewable electricity generation. In this transactive framework, a wind or solar farm may directly sell to consumers a claim on their future power output in the form of nonfungible blockchain tokens. Using the flexibility of smart contract code, which executes irrevocably on a blockchain, the realised generation levels will offset the token holders’ electricity consumption in near real-time. To elucidate the flexibility offered by such smart contracts, two ways of structuring these power delivery instruments are considered: firstly, an exotic tranched system, where more senior tokens holders enjoy priority claims on power, as compared against a simpler pro-rata scheme, where the realised output of a generator is equally apportioned between token holders. A notional market simulation is provided to explore whether, for instance, consumers could exploit the flatter power delivery profiles of more senior tranches to better schedule their responsive demands

Lightweight Blockchain Framework for Location-aware Peer-to-Peer Energy Trading

Peer-to-Peer (P2P) energy trading can facilitate integration of a large number of small-scale producers and consumers into energy markets. Decentralized management of these new market participants is challenging in terms of market settlement, participant reputation and consideration of grid constraints. This paper proposes a blockchain-enabled framework for P2P energy trading among producer and consumer agents in a smart grid. A fully decentralized market settlement mechanism is designed, which does not rely on a centralized entity to settle the market and encourages producers and consumers to negotiate on energy trading with their nearby agents truthfully. To this end, the electrical distance of agents is considered in the pricing mechanism to encourage agents to trade with their neighboring agents. In addition, a reputation factor is considered for each agent, reflecting its past performance in delivering the committed energy. Before starting the negotiation, agents select their trading partners based on their preferences over the reputation and proximity of the trading partners. An Anonymous Proof of Location (A-PoL) algorithm is proposed that allows agents to prove their location without revealing their real identity. The practicality of the proposed framework is illustrated through several case studies, and its security and privacy are analyzed in detail