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

Achieving an optimal trade-off between revenue and energy peak within a smart grid environment

We consider an energy provider whose goal is to simultaneously set revenue-maximizing prices and meet a peak load constraint. In our bilevel setting, the provider acts as a leader (upper level) that takes into account a smart grid (lower level) that minimizes the sum of users' disutilities. The latter bases its decisions on the hourly prices set by the leader, as well as the schedule preferences set by the users for each task. Considering both the monopolistic and competitive situations, we illustrate numerically the validity of the approach, which achieves an 'optimal' trade-off between three objectives: revenue, user cost, and peak demand

Renewables 2005: Global Status Report

The Global Status Report provides an assessment of several renewables technologies -- small hydro, modern biomass, wind, solar, geothermal, and biofuels -- that are now competing with conventional fuels in four distinct markets: power generation, hot water and space heating, transportation fuels, and rural (off-grid) energy supplies. The report finds that government support for renewable energy is growing rapidly. At least 48 countries now have some type of renewable energy promotion policy, including 14 developing countries. Most targets are for shares of electricity production, typically 5-30 percent, by the 2010-2012 timeframe. Mandates for blending biofuels into vehicle fuels have been enacted in at least 20 states and provinces worldwide as well as in three key countries -- Brazil, China and India. Government leadership provides the key to market success, according to the report. The market leaders in renewable energy in 2004 were Brazil in biofuels, China in solar hot water, Germany in solar electricity, and Spain in wind power. The Global Status Report fills a gap in the international energy reporting arena, which has tended to neglect the emerging renewable energy technologies. Regular updates will be produced in the future. The report was produced and published by the Worldwatch Institute and released today at the Beijing International Renewable Energy Conference 2005, sponsored by the Government of China. This Conference brings together government and private leaders from around the world, providing a forum for international leadership on renewable energy and connects the wide variety of stakeholders that came together at the International Conference for Renewable Energies in Bonn, Germany, in 2004. The creation of REN21 was sponsored by the German Federal Ministry for Economic Cooperation and Development and the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Formally established in Copenhagen in June 2005, REN21 is now supported by a steering committee of 11 governments, 5 intergovernmental organizations, 5 non-governmental organizations, and several regional, local, and private organizations

Agglomerative Magnets and Informal Regulatory Networks: Electricity Market Design Convergence in the USA and Continental Europe

The absence of one broadly accepted design template for liberalised electricity markets induces regulatory competition and institutional diversity. Focussing on continental Europe and the USA, this analysis explores how agents and structures accelerate or impede the move to one standard market design in the electricity sector. It reveals that market design convergence in Europe is driven by the 'Florence Consensus,' a tripartite coalition between the European Commission fostering European integration and the internal market, informal regulatory networks between grid operators, standardisation authorities and regulators, who have been coordinating their actions in the 'Florence Forum,' and epistemic communities exemplified in the Florence School of Regulation. In contrast, the United States' Federal Energy Regulatory Commission lacks support among politicians, many states' public utility commissions, the neo-liberal intelligentsia and even industrial lobbying groups to effectively push for a standardised market design. However, design convergence in the USA may be induced by the gradual expansion of multi-state markets operated by regional transmission organisations.Electricity, Deregulation, Regulatory Competition, Policy Diffusion

Residential distributed generation : decision support software to evaluate opportunities in the residential market : a thesis submitted in partial fulfilment of the requirement for the degree of Masters of Engineering at Massey University, Palmerston North, New Zealand /

The residential market in New Zealand consumes a significant proportion of our electricity production and is one of the fastest growing sectors. As a vertically integrated generator retailer in the New Zealand electricity industry, Meridian Energy Ltd is concerned at retaining and growing their customer base. They recognise that utilisation of emerging distributed generation [DG] technologies can provide a competitive advantage in the market place. A decision tool was developed to help Meridian identify opportunities within the residential market for applications of DG. The model compares the cost to serve a household's energy needs using a business as usual case with a DG case on an annual basis for a single household or a neighbourhood. A modular approach was used for ease of development and to enable future enhancements. The main modules were: load profile development, DG technology, operation control, costing and a calculation engine. The load profile module estimated space heating/cooling, water heating and other electrical loads for each 30 minute period for 8 representative days of a year based on national end-use statistics and a set of 40 reference profiles. A Gamma distribution was used to simulate diversity between houses. The calculation engine computed the amount of demand that could be met by the DG technologies and hence the residual demand or surplus for export. The pricing module estimated the annual cost including aspects such as: capital cost, fuel cost, maintenance, value of export and cost of import. The technology modules allowed different DG technologies, as well as a range of parameters to be selected. It included renewable energy resource modelling. The performance module allowed different operation control of the heat engine technologies including: base load, electrical peaking, heat peaking, load following (heat-led) and load following(electricity-led). The model was implemented using Microsoft Visual Basic for Applications, in Excel. A series of user-forms were developed to enable the model to be run with a minimum of user input. Three case studies were undertaken. In the first, five technology types were modelled, with the heat pump and Stirling engine looking the most promising. The second case study involved these two technologies in a Christchurch urban area study. A hypothetical network analysis showed the benefit that these technologies could have in reducing peak loading on the network. The third case study examined the sensitivity of the results to the value of specific variables. Load size and capital cost had the strongest influence on NPV

The Environmental Responsibility of the Regionalizing Electric Utility Industry

In this Article, I will address environmental issues in the context of our rapidly evolving understanding of restructuring. The market for electricity is fast becoming a series of regional marketplaces for wholesale transactions, operating on bid-based systems that move power at the lowest cost. There are plenty of states where power is still delivered as it has been for decades: by bundled service provided by vertically integrated utilities. However, the trend is toward regionalization, where independent entities control the transmission grid and play a major role in determining how power is delivered. These market participants, confusingly, have been known by a number of names and acronyms, though the most recent one is regional transmission organizations ( RTOs ). The trend toward regiona

Deregulation and environmental differentiation in the electric utility industry.

This paper analyzes how economic deregulation impacts firm strategies and environmental quality in the electric utility industry. We find evidence that the deregulation introduced to this historically staid industry has stimulated environmental differentiation. Differentiation is most likely to appear where its point of uniqueness is valued by customers, and we confirm this relationship in our sample. Specifically, utilities that served customers who exhibited higher levels of environmental sensitivity generated more green power. The tendency for firms to differentiate in this way is lessened if they are relatively more dependent on coal-fired generation or relatively more efficient. Thus, there is evidence that firms sort themselves into either differentiation or low-cost strategies as the competitive realities of a deregulated world unfold. Deregulation and the ensuing environmental differentiation illustrate how utilities exploited formerly unmet customer demand for green power. The result has been greater levels of renewable generation and, hence, a cleaner environment.Deregulation; Environmental differentiation; Electric utility; Renewable energy; Productive efficiency;