Bilateral Contract Networks for Peer-to-Peer Energy Trading

By Thomas Morstyn, Alexander Teytelboym, Malcolm Duncan McCulloch. IEEE Transactions on Smart Grid, 2019

470 citations recorded by the source corpus.

This paper proposes bilateral contract networks as a new scalable market design for peer-to-peer energy trading. Coordinating small-scale distributed energy resources to shape overall demand could offer significant value to power systems, by alleviating the need for investments in upstream generation and transmission infrastructure, increasing network efficiency and increasing energy security. However, incentivising coordination between the owners of large-scale and small-scale energy resources at different levels of the power system remains an unsolved challenge. This paper introduces real-time and forward markets, consisting of energy contracts offered between generators with fuel-based sources, suppliers acting as intermediaries and consumers with inflexible loads, time-coupled flexible loads and/or renewable sources. For each type of agent, utility-maximising preferences for real-time contracts and forward contracts are derived. It is shown that these preferences satisfy full substitutability conditions essential for establishing the existence of a stable outcome—an agreed network of contracts specifying energy trades and prices, which agents do not wish to mutually deviate from. Important characteristics of energy trading are incorporated, including upstream–downstream energy balance and forward market uncertainty. Full substitutability ensures a distributed price-adjustment process can be used, which only requires local agent decisions and agent-to-agent communication between trading partners.

Subfields: Control and Systems Engineering, Electrical and Electronic Engineering

View Paper: https://www.semanticscholar.org/paper/3c2f6062f8f25512adcdf80b25210f3515012867

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Citations in the corpus

Peer-to-peer energy sharing through a two-stage aggregated battery control in a community Microgrid (2018, background): “[29,30], or from merely the community point of view, e.”
Designing Decentralized Markets for Distribution System Flexibility (2019, background): “Recently, new designs for peer-to-peer (P2P) energy trading have been proposed for integrating prosumer flexibility into power system operations [39]–[41].”
Local flexibility markets: Literature review on concepts, models and clearing methods (2020, methodology): “[119] Morstyn T, Teytelboym A, McCulloch MD.”
Peer-to-Peer Energy Systems for Connected Communities: A Review of Recent Advances and Emerging Challenges (2020, background): “Decentralized market X X [8], [11], [12], [35]–[37]”
Peer-to-peer and community-based markets: A comprehensive review (2018, background): “[50] implemented a P2P energy trading for real-time and forward markets of prosumers.”
Multiclass Energy Management for Peer-to-Peer Energy Trading Driven by Prosumer Preferences (2019, background): “With the rise of distributed renewable sources, energy storage and communications at the distribution level, P2P energy market platforms could be used to coordinate energy trading between prosumers [30], [31].”
Peer-to-Peer Trading in Electricity Networks: An Overview (2020, background): “Under this category, a large number of techniques have been proposed to ensure prosumer-centric delivery of outcomes including multi-class energy management [34], motivational psychology [3], bilateral contract theory [27], [54], reinforcement learning [50], [56], game theory [3], prediction-integra”
State-of-the-Art Analysis and Perspectives for Peer-to-Peer Energy Trading (2020, background): “[45] that the proposed bilateral contract networks could be applied to enable direct energy trading among prosumers, retailers, and large generators.”
A Decentralized Bilateral Energy Trading System for Peer-to-Peer Electricity Markets (2020, background): “A bilateral contract network for P2P energy trading between generators, suppliers, and prosumers is proposed in [21].”
A Motivational Game-Theoretic Approach for Peer-to-Peer Energy Trading in the Smart Grid (2019, background): “price [17], incentivizing prosumers [18], maintaining network constraints [19], and designing business contracts between different prosumers [20].”