IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v228y2018icp689-699.html
   My bibliography  Save this article

Dynamic pricing for decentralized energy trading in micro-grids

Author

Listed:
  • Liu, Youbo
  • Zuo, Kunyu
  • Liu, Xueqin (Amy)
  • Liu, Junyong
  • Kennedy, Jason M.

Abstract

The fast deployment of distributed energy resources in the electric power system has highlighted the need for an efficient energy trading transactive model, without the need for centralized dispatch. In this field, a particular challenge is the determination of an effective pricing scheme that is able to produce benefits for all participants. In this paper, a novel dynamic pricing methodology is presented, offering a market-oriented means to drive decentralized energy trading and to optimize financial benefits for owners of distributed energy resources. Firstly, a price-responsive model for each type of distributed energy resource is investigated. Particularly, the decoupled State of Charge function is proposed to calculate the value of a single charging/discharging action for energy storage systems. In addition, an adaptable three-tiered framework is designed, including micro-grid balancing, aggregator scheduling, and trading optimization. By launching Tier I, II, and III, the spot prices for participants are iteratively updated and optimized in inner-micro-grid, inner-aggregator, and inter-aggregators level. The framework is able to maximize the financial savings from renewable energy, and meanwhile, provide a dynamic price signal to assist stakeholders in determining response actions and trading strategies. A realistic case is simulated using Java Agent Development framework based multi-agent modeling. The results indicate that the presented methodology enables decentralized energy trading and permits easier marketization of micro-grids with a high share of distributed energy resources.

Suggested Citation

  • Liu, Youbo & Zuo, Kunyu & Liu, Xueqin (Amy) & Liu, Junyong & Kennedy, Jason M., 2018. "Dynamic pricing for decentralized energy trading in micro-grids," Applied Energy, Elsevier, vol. 228(C), pages 689-699.
    • Handle: RePEc:eee:appene:v:228:y:2018:i:c:p:689-699
    DOI: 10.1016/j.apenergy.2018.06.124
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261918309930
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2018.06.124?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Nojavan, Sayyad & Najafi-Ghalelou, Afshin & Majidi, Majid & Zare, Kazem, 2018. "Optimal bidding and offering strategies of merchant compressed air energy storage in deregulated electricity market using robust optimization approach," Energy, Elsevier, vol. 142(C), pages 250-257.
    2. Zamani-Dehkordi, Payam & Shafiee, Soroush & Rakai, Logan & Knight, Andrew M. & Zareipour, Hamidreza, 2017. "Price impact assessment for large-scale merchant energy storage facilities," Energy, Elsevier, vol. 125(C), pages 27-43.
    3. Abdi, Hamdi & Beigvand, Soheil Derafshi & Scala, Massimo La, 2017. "A review of optimal power flow studies applied to smart grids and microgrids," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 742-766.
    4. Carreiro, Andreia M. & Jorge, Humberto M. & Antunes, Carlos Henggeler, 2017. "Energy management systems aggregators: A literature survey," Renewable and Sustainable Energy Reviews, Elsevier, vol. 73(C), pages 1160-1172.
    5. Armendáriz, M. & Heleno, M. & Cardoso, G. & Mashayekh, S. & Stadler, M. & Nordström, L., 2017. "Coordinated microgrid investment and planning process considering the system operator," Applied Energy, Elsevier, vol. 200(C), pages 132-140.
    6. Sarshar, Javad & Moosapour, Seyyed Sajjad & Joorabian, Mahmood, 2017. "Multi-objective energy management of a micro-grid considering uncertainty in wind power forecasting," Energy, Elsevier, vol. 139(C), pages 680-693.
    7. Davatgaran, Vahid & Saniei, Mohsen & Mortazavi, Seyed Saeidollah, 2018. "Optimal bidding strategy for an energy hub in energy market," Energy, Elsevier, vol. 148(C), pages 482-493.
    8. Zhou, Yue & Wu, Jianzhong & Long, Chao, 2018. "Evaluation of peer-to-peer energy sharing mechanisms based on a multiagent simulation framework," Applied Energy, Elsevier, vol. 222(C), pages 993-1022.
    9. Fan, Shu & Hyndman, Rob J., 2011. "The price elasticity of electricity demand in South Australia," Energy Policy, Elsevier, vol. 39(6), pages 3709-3719, June.
    10. Yan, Xiaohe & Gu, Chenghong & Li, Furong & Xiang, Yue, 2018. "Network pricing for customer-operated energy storage in distribution networks," Applied Energy, Elsevier, vol. 212(C), pages 283-292.
    11. Zhang, Chenghua & Wu, Jianzhong & Zhou, Yue & Cheng, Meng & Long, Chao, 2018. "Peer-to-Peer energy trading in a Microgrid," Applied Energy, Elsevier, vol. 220(C), pages 1-12.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Anantha Krishnan, V. & Balamurugan, P., 2022. "An efficient DLN2-CRSO approach based dynamic stability enhancement in micro-grid system," Applied Energy, Elsevier, vol. 322(C).
    2. Ge, Shaoyun & Li, Jifeng & He, Xingtang & Liu, Hong, 2021. "Joint energy market design for local integrated energy system service procurement considering demand flexibility," Applied Energy, Elsevier, vol. 297(C).
    3. Xiaoling Yuan & Can Cui & Guanxin Zhu & Hanqing Ma & Hao Cao, 2023. "Research on the Optimization of Energy–Carbon Co-Sharing Operation in Multiple Multi-Energy Microgrids Based on Nash Negotiation," Energies, MDPI, vol. 16(15), pages 1-20, July.
    4. Schwidtal, J.M. & Piccini, P. & Troncia, M. & Chitchyan, R. & Montakhabi, M. & Francis, C. & Gorbatcheva, A. & Capper, T. & Mustafa, M.A. & Andoni, M. & Robu, V. & Bahloul, M. & Scott, I.J. & Mbavarir, 2023. "Emerging business models in local energy markets: A systematic review of peer-to-peer, community self-consumption, and transactive energy models," Renewable and Sustainable Energy Reviews, Elsevier, vol. 179(C).
    5. Wu, Qiong & Xie, Zhun & Ren, Hongbo & Li, Qifen & Yang, Yongwen, 2022. "Optimal trading strategies for multi-energy microgrid cluster considering demand response under different trading modes: A comparison study," Energy, Elsevier, vol. 254(PC).
    6. Àlex Alonso & Jordi de la Hoz & Helena Martín & Sergio Coronas & José Matas, 2021. "Individual vs. Community: Economic Assessment of Energy Management Systems under Different Regulatory Frameworks," Energies, MDPI, vol. 14(3), pages 1-27, January.
    7. Tong Xing & Hongyu Lin & Zhongfu Tan & Liwei Ju, 2019. "Coordinated Energy Management for Micro Energy Systems Considering Carbon Emissions Using Multi-Objective Optimization," Energies, MDPI, vol. 12(23), pages 1-27, November.
    8. Ning Wang & Weisheng Xu & Zhiyu Xu & Weihui Shao, 2018. "Peer-to-Peer Energy Trading among Microgrids with Multidimensional Willingness," Energies, MDPI, vol. 11(12), pages 1-22, November.
    9. Àlex Alonso-Travesset & Helena Martín & Sergio Coronas & Jordi de la Hoz, 2022. "Optimization Models under Uncertainty in Distributed Generation Systems: A Review," Energies, MDPI, vol. 15(5), pages 1-40, March.
    10. Huiru Zhao & Hao Lu & Bingkang Li & Xuejie Wang & Shiying Zhang & Yuwei Wang, 2020. "Stochastic Optimization of Microgrid Participating Day-Ahead Market Operation Strategy with Consideration of Energy Storage System and Demand Response," Energies, MDPI, vol. 13(5), pages 1-16, March.
    11. Capper, Timothy & Gorbatcheva, Anna & Mustafa, Mustafa A. & Bahloul, Mohamed & Schwidtal, Jan Marc & Chitchyan, Ruzanna & Andoni, Merlinda & Robu, Valentin & Montakhabi, Mehdi & Scott, Ian J. & Franci, 2022. "Peer-to-peer, community self-consumption, and transactive energy: A systematic literature review of local energy market models," Renewable and Sustainable Energy Reviews, Elsevier, vol. 162(C).
    12. Aguilar, J. & Garces-Jimenez, A. & R-Moreno, M.D. & García, Rodrigo, 2021. "A systematic literature review on the use of artificial intelligence in energy self-management in smart buildings," Renewable and Sustainable Energy Reviews, Elsevier, vol. 151(C).
    13. Ju, Liwei & Tan, Qinliang & Lin, Hongyu & Mei, Shufang & Li, Nan & Lu, Yan & Wang, Yao, 2020. "A two-stage optimal coordinated scheduling strategy for micro energy grid integrating intermittent renewable energy sources considering multi-energy flexible conversion," Energy, Elsevier, vol. 196(C).
    14. Adia Khalid & Sheraz Aslam & Khursheed Aurangzeb & Syed Irtaza Haider & Mahmood Ashraf & Nadeem Javaid, 2018. "An Efficient Energy Management Approach Using Fog-as-a-Service for Sharing Economy in a Smart Grid," Energies, MDPI, vol. 11(12), pages 1-17, December.
    15. Azim, M. Imran & Tushar, Wayes & Saha, Tapan K., 2020. "Investigating the impact of P2P trading on power losses in grid-connected networks with prosumers," Applied Energy, Elsevier, vol. 263(C).
    16. Kong, Weicong & Jia, Youwei & Dong, Zhao Yang & Meng, Ke & Chai, Songjian, 2020. "Hybrid approaches based on deep whole-sky-image learning to photovoltaic generation forecasting," Applied Energy, Elsevier, vol. 280(C).
    17. Hua, Weiqi & Jiang, Jing & Sun, Hongjian & Wu, Jianzhong, 2020. "A blockchain based peer-to-peer trading framework integrating energy and carbon markets," Applied Energy, Elsevier, vol. 279(C).
    18. Yi Kuang & Xiuli Wang & Hongyang Zhao & Yijun Huang & Xianlong Chen & Xifan Wang, 2020. "Agent-Based Energy Sharing Mechanism Using Deep Deterministic Policy Gradient Algorithm," Energies, MDPI, vol. 13(19), pages 1-20, September.
    19. Hui Huang & Shilin Nie & Jin Lin & Yuanyuan Wang & Jun Dong, 2020. "Optimization of Peer-to-Peer Power Trading in a Microgrid with Distributed PV and Battery Energy Storage Systems," Sustainability, MDPI, vol. 12(3), pages 1-20, January.
    20. Mangirdas Morkunas & Gintaras Cernius & Gintare Giriuniene, 2019. "Assessing Business Risks of Natural Gas Trading Companies: Evidence from GET Baltic," Energies, MDPI, vol. 12(14), pages 1-14, July.
    21. Janko, Samantha & Johnson, Nathan G., 2020. "Reputation-based competitive pricing negotiation and power trading for grid-connected microgrid networks," Applied Energy, Elsevier, vol. 277(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gržanić, M. & Capuder, T. & Zhang, N. & Huang, W., 2022. "Prosumers as active market participants: A systematic review of evolution of opportunities, models and challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 154(C).
    2. Lyu, Cheng & Jia, Youwei & Xu, Zhao, 2021. "Fully decentralized peer-to-peer energy sharing framework for smart buildings with local battery system and aggregated electric vehicles," Applied Energy, Elsevier, vol. 299(C).
    3. Lefeng, Shi & Shengnan, Lv & Chunxiu, Liu & Yue, Zhou & Cipcigan, Liana & Acker, Thomas L., 2020. "A framework for electric vehicle power supply chain development," Utilities Policy, Elsevier, vol. 64(C).
    4. Wang, Zibo & Yu, Xiaodan & Mu, Yunfei & Jia, Hongjie, 2020. "A distributed Peer-to-Peer energy transaction method for diversified prosumers in Urban Community Microgrid System," Applied Energy, Elsevier, vol. 260(C).
    5. Sara Khan & Uzma Amin & Ahmed Abu-Siada, 2024. "P2P Energy Trading of EVs Using Blockchain Technology in Centralized and Decentralized Networks: A Review," Energies, MDPI, vol. 17(9), pages 1-17, April.
    6. Davarzani, Sima & Pisica, Ioana & Taylor, Gareth A. & Munisami, Kevin J., 2021. "Residential Demand Response Strategies and Applications in Active Distribution Network Management," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    7. Soto, Esteban A. & Bosman, Lisa B. & Wollega, Ebisa & Leon-Salas, Walter D., 2021. "Peer-to-peer energy trading: A review of the literature," Applied Energy, Elsevier, vol. 283(C).
    8. Abdullah M. Alabdullatif & Enrico H. Gerding & Alvaro Perez-Diaz, 2020. "Market Design and Trading Strategies for Community Energy Markets with Storage and Renewable Supply," Energies, MDPI, vol. 13(4), pages 1-31, February.
    9. Esmat, Ayman & de Vos, Martijn & Ghiassi-Farrokhfal, Yashar & Palensky, Peter & Epema, Dick, 2021. "A novel decentralized platform for peer-to-peer energy trading market with blockchain technology," Applied Energy, Elsevier, vol. 282(PA).
    10. Capper, Timothy & Gorbatcheva, Anna & Mustafa, Mustafa A. & Bahloul, Mohamed & Schwidtal, Jan Marc & Chitchyan, Ruzanna & Andoni, Merlinda & Robu, Valentin & Montakhabi, Mehdi & Scott, Ian J. & Franci, 2022. "Peer-to-peer, community self-consumption, and transactive energy: A systematic literature review of local energy market models," Renewable and Sustainable Energy Reviews, Elsevier, vol. 162(C).
    11. Rodrigues, Daniel L. & Ye, Xianming & Xia, Xiaohua & Zhu, Bing, 2020. "Battery energy storage sizing optimisation for different ownership structures in a peer-to-peer energy sharing community," Applied Energy, Elsevier, vol. 262(C).
    12. Filipe Bandeiras & Álvaro Gomes & Mário Gomes & Paulo Coelho, 2023. "Exploring Energy Trading Markets in Smart Grid and Microgrid Systems and Their Implications for Sustainability in Smart Cities," Energies, MDPI, vol. 16(2), pages 1-41, January.
    13. Wang, Zibo & Yu, Xiaodan & Mu, Yunfei & Jia, Hongjie & Jiang, Qian & Wang, Xiaoyu, 2021. "Peer-to-Peer energy trading strategy for energy balance service provider (EBSP) considering market elasticity in community microgrid," Applied Energy, Elsevier, vol. 303(C).
    14. El-Baz, Wessam & Tzscheutschler, Peter & Wagner, Ulrich, 2019. "Integration of energy markets in microgrids: A double-sided auction with device-oriented bidding strategies," Applied Energy, Elsevier, vol. 241(C), pages 625-639.
    15. Soto, Esteban A. & Bosman, Lisa B. & Wollega, Ebisa & Leon-Salas, Walter D., 2022. "Comparison of net-metering with peer-to-peer models using the grid and electric vehicles for the electricity exchange," Applied Energy, Elsevier, vol. 310(C).
    16. Qiu, Dawei & Ye, Yujian & Papadaskalopoulos, Dimitrios & Strbac, Goran, 2021. "Scalable coordinated management of peer-to-peer energy trading: A multi-cluster deep reinforcement learning approach," Applied Energy, Elsevier, vol. 292(C).
    17. Lüth, Alexandra & Zepter, Jan Martin & Crespo del Granado, Pedro & Egging, Ruud, 2018. "Local electricity market designs for peer-to-peer trading: The role of battery flexibility," Applied Energy, Elsevier, vol. 229(C), pages 1233-1243.
    18. Javier Parra-Domínguez & Esteban Sánchez & Ángel Ordóñez, 2023. "The Prosumer: A Systematic Review of the New Paradigm in Energy and Sustainable Development," Sustainability, MDPI, vol. 15(13), pages 1-44, July.
    19. Meena, Nand K. & Yang, Jin & Zacharis, Evan, 2019. "Optimisation framework for the design and operation of open-market urban and remote community microgrids," Applied Energy, Elsevier, vol. 252(C), pages 1-1.
    20. Schwidtal, J.M. & Piccini, P. & Troncia, M. & Chitchyan, R. & Montakhabi, M. & Francis, C. & Gorbatcheva, A. & Capper, T. & Mustafa, M.A. & Andoni, M. & Robu, V. & Bahloul, M. & Scott, I.J. & Mbavarir, 2023. "Emerging business models in local energy markets: A systematic review of peer-to-peer, community self-consumption, and transactive energy models," Renewable and Sustainable Energy Reviews, Elsevier, vol. 179(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:228:y:2018:i:c:p:689-699. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.