Energy Management of Prosumers in P2P Trading Through Prioritisation of Generation and Consumption

ABSTRACT In recent years, peer‐to‐peer (P2P) energy trading has attracted significant attention with the goals of making optimal use of local generation, reducing costs, increasing the share of renewables in energy consumption and enhancing the resilience of the local grid. One aspect that has received less attention in designed settlement mechanisms for P2P energy trading is the prioritisation of generation and consumption by energy sellers and buyers. Energy sellers/buyers typically own different devices for generation/consumption and incur different rates/costs depending on their production/consumption level; therefore, prioritisation of generation and consumption in P2P markets is always a fundamental element. In this paper, this issue is modelled in detail: sellers and buyers prioritise their generation and consumption devices in each trading time interval and enter the P2P market according to those priorities. The prioritisation is based on price and the amount of energy produced/consumed, effectively giving prosumers full control over managing their resources. On the other hand, the determination of settlement and transaction prices is entirely dependent on supply and demand, which results in trades being settled fairly. In fact, the settlement price for transactions leads to satisfaction for both buyers and sellers, because it fully reflects their preferences. Additionally, a negotiation‐based approach between buyers and sellers is proposed, relying on direct negotiation between them. In this approach, buyers and sellers interact with the aim of increasing social welfare and thereby can achieve their energy trading objectives. The designed market‐settlement mechanism offers technical advantages such as fast response and low latency, computational scalability, ease of implementation, compatibility with variable resources and storage and reduced need to exchange sensitive information. Simulation results show that, besides improving metrics such as simulation time and social welfare, the proposed mechanism is also highly effective in aspects like fairness in energy distribution.