Peer-to-Peer Energy Trading Enabled Optimal Decentralized Operation of Smart Distribution Grids

Currently, the distribution systems are moving towards decentralized operation due to the high penetration of distributed energy resources (DERs). Peer-to-peer (P2P) energy trading has been an emerging concept that promotes autonomous DER participation in energy markets while preserving their privacy concerns. In this work, a novel P2P energy trading enabled decentralized market framework is proposed for the optimal operation of distribution grids. Nodal agents and P2P agents are established as market participants, and market equilibrium is iteratively achieved via alternating direction method of multipliers based algorithms. The proposed market framework guarantees grid constraint satisfaction, market equilibrium, and global optimality for all market participants without violating their privacy concerns. The agent coordination and local optimization are designed such that fairness of the market clearing mechanism, prosumer autonomy, and prosumer anonymity is preserved without compromising the market efficiency. Further, costs/rewards of ancillary services associated with the P2P energy transactions are considered as trade-offs within the market mechanism, and those are accurately allocated to the respective trading pairs. The case studies illustrate the effectiveness and scalability of the proposed market framework.