FEASIBILITY ANALYSIS OF PEER-TO-PEER(P2P) ENERGY TRADING USING STACKELBERG EQUILIBRIUM

Abstract

The increasing level of Distributed Energy Resources (DER) has widely transformed the production, delivery, and consumption of energy including microgrids. As a result of the increasing levels of DERs, consumers are now becoming prosumers who both produce and consume energy. As renewable energy becomes more prevalent at the residential level, we need to adopt a new market strategy that will help to establish prices, decentralize and make the energy market and the energy infrastructure more flexible. However, integrating renewable energy into today’s electricity infrastructure is a difficult task. The new smart grid technology will need to be based on mathematical techniques like game theory. An other difficulty is how the grid decides on a price lower than the P2P price that allows it to sell its energy to prosumers if demand falls below the grid’s load requirement. There is a need for local energy markets, to enable the direct selling of renewable energy to con sumers and prosumers without intermediaries’ involvement. Recent developments have led to peer-to-peer(P2P) trading emerging as a possible mechanism for prosumers to actively participate in the energy market. So, we present a peer-to-peer (P2P) energy-sharing strategy for building prosumers. A Stackelberg game model with building prosumers and system operators as players is included in the proposed scheme. To find Stackelberg equi librium(SE), an algorithm has been developed for optimizing internal trading prices and consumption while maximizing participants’ profits. By analyzing SE, we can come up with a feasible solution in the scenario that peer-to-peer trading becomes profitable for a locality. The proposed system is simulated in MATLAB software and different case studies are furnished to study the benefit of having P2P trading.