A novel peer-to-peer energy sharing mechanism considering shared energy storage units

Significance 

Energy security is pivotal for reliable and sustainable socio-economic development. Recently, the generation and consumption of renewable energy have become key drivers to enhancing global energy security. Likewise, the current power system is undergoing a significant transformation towards renewable energy not only to improve energy security but also to reduce greenhouse gas emissions and improve sustainability. This has resulted in intense research and installation of distributed energy resources (DERs) like wind turbines and solar cells.

The large-scale installation of DERs enhances effective energy consumption management and flexibility as it uses localized renewable energy well. Consequently, it benefits the grid and the DER owners, who can sell their excess energy for profits. DER investment has been encouraged by implementing tariff-based schemes, which despite holding great potential, have been criticized for being less competitive and offering limited benefits. As an alternative, peer-to-peer (P2P) energy trading marketing consisting of P2P service providers and energy buyers and sellers has been fronted as a promising model in the energy sharing market.

In a P2P market, both peers can buy/sell to achieve financial gains and flexible energy management without the involvement of utility companies. Energy storage devices like batteries remain a vital component of the residential P2P energy trading market. Despite the environmental and economic benefits of P2P market, the high investment costs of batteries remain a barrier. Although shared energy storage (SES) scheme has been deemed an effective business model due to the benefits of economy of scale, there is still a limited understanding of residential P2P energy markets embedded with SES. Moreover, there are a number of research gaps related to the physical factors, stakeholder structure and pricing mechanism that affect the successful implementation of the P2P market.

On this account, PhD candidate Boshen Zheng, Professor Wei Wei and Professor Shengwei Mei in collaboration with Professor Yue Chen from The Chinese University of Hong Kong and Professor Qiuwei Wu from Technical University of Denmark proposed a novel P2P energy trading market embedded with residential SES units. These units were installed on the energy consumer side and all the participants were considered self-interested and rational in terms of their decisions to buy/sell energy amongst their peers. The market participants and market equilibrium as well as the feasible equilibrium solution strategies, were modeled. The work is published in the journal, Applied Energy.

The authors showed that the implementation of SES could provide more flexible energy consumption strategies for both energy buyers and sellers, as illustrated by the market equilibrium problem consisting of two intertwined games. The first game between energy buyers and sellers was described as non-cooperative, considering the conflicts between these two groups. The second game that comprised energy buyers/SES users was described as a generalized Nash equilibrium problem based on the scarcity of the SES resources. The interactions between the two games led to the problem equilibrium, resulting in endogenous allocation of SES storage capacity and determination of the P2P transaction price.

The market equilibrium problems were solved using Karush-Kuhn-Tucker (KKT) optimality conditions derived from the optimal problems of all the participants coupled with linearization techniques. After concatenating together all the conditions, the market equilibrium was cast as a mixed-integer linear program, where the SES capacity allocation and P2P transactional prices were also determined from the market equilibrium. The P2P2 prices were also influenced by the demand and supply relationships, and they reflected the value of the energy resources. Furthermore, introducing SES could reduce costs and ensure fairness in capacity allocation.

In summary, the design of a P2P energy trading mechanism embedded with SES units for residential consumers and local DERs owners considering the energy pricing mechanisms and stakeholder structure was reported. The benefits of this business model for the transactive energy market included enabling sharing of excess energy with peers, improved competition, improved energy consumption management, higher financial benefits, and enhanced energy security. In a statement to Advances in Engineering, the authors explained that P2P energy trading benefits all participants and is a promising business model for improving the consumption of local renewable energy and overall energy security.

A novel peer-to-peer energy sharing mechanism considering shared energy storage units - Advances in Engineering A novel peer-to-peer energy sharing mechanism considering shared energy storage units - Advances in Engineering

About the author

Boshen Zheng received the B.S. degree from Tsinghua University, Beijing, China, in 2021, where he is currently pursuing the Ph.D. degree.

His research interests include online optimization, game theory, peer-to-peer energy sharing and shared energy storage.

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About the author

Wei Wei
Associate Professor, IET Fellow
Department of Electrical Engineering, Tsinghua University

Wei Wei (SM’18) received the B.Sc. and Ph.D. degrees in electrical engineering from Tsinghua University, Beijing, China, in 2008 and 2013, respectively. He was a Postdoctoral Research Associate with Tsinghua University from 2013 to 2015. He was a Visiting Scholar with Cornell University, Ithaca, NY, USA, in 2014, and a Visiting Scholar with Harvard University, Cambridge, MA, USA, in 2015.

He is currently an Associate Professor with Tsinghua University. His research interests include computational optimization and energy system economics.

About the author

Yue Chen
Assistant Professor
Department of Mechanical and Automation Engineering, The Chinese University of Hong Kong

Yue Chen (Member, IEEE) received the B.E. degree in electrical engineering from Tsinghua University, Beijing, China, in 2015, the B.S. degree in economics from Peking University, Beijing, China, in 2017, and the Ph.D. degree in electrical engineering from Tsinghua University in 2020. From 2018 to 2019, she was a visiting student with the California Institute of Technology, Pasadena, CA, USA.

She is currently an Assistant Professor with the Department of Mechanical and Automation Engineering, The Chinese University of Hong Kong, Hong Kong SAR, China. Her research interests include optimization, game theory, mathematical economics, and their applications in smart grid and integrated energy systems.

About the author

Qiuwei Wu
Associate Professor
Center for Electric Power and Energy, Technical University of Denmark, Kgs. Lyngby, Denmark

Qiuwei Wu (SM’15) received the Ph.D. degree in power system engineering from Nanyang Technological University, Singapore, in 2009.

He is currently an Associate Professor with the Department of Electrical Engineering, Technical University of Denmark, Kongens Lyngby, Denmark. His research interest includes operation and control of power systems with high penetration of renewables, including wind power modeling and control, active distribution networks, and operation of integrated energy systems.

About the author

Shengwei Mei
Professor, IEEE Fellow, IET Fellow
Department of Electrical Engineering, Tsinghua University

Shengwei Mei (F’15) received the B.Sc. degree in mathematics from Xinjiang University, Urumqi, China, the M.Sc. degree in operations research from Tsinghua University, Beijing, China, and the Ph.D. degree in automatic control from the Chinese Academy of Sciences, Beijing, in 1984, 1989, and 1996, respectively.

He is currently working as a Professor with Tsinghua University. He is also the Director of the New Energy Industry Research Center, Qinghai University, Qinghai. His research interests include robust control of power systems, comprehensive utilization of new energy, and disaster prevention of large power grids.

Reference

Zheng, B., Wei, W., Chen, Y., Wu, Q., & Mei, S. (2022). A peer-to-peer energy trading market embedded with residential shared energy storage unitsApplied Energy, 308, 118400.

Go To Applied Energy

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