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Automated peer-to-peer negotiation for energy contract settlements in residential cooperatives

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  • Chakraborty, Shantanu
  • Baarslag, Tim
  • Kaisers, Michael

Abstract

This paper presents an automated peer-to-peer negotiation strategy for settling energy contracts among prosumers in a Residential Energy Cooperative considering heterogeneity prosumer preferences. The heterogeneity arises from prosumers’ evaluation of energy contracts through multiple societal and environmental criteria and the prosumers’ private preferences over those criteria. The prosumers engage in bilateral negotiations with peers to mutually agree on periodical energy contracts/loans consisting of the energy volume to be exchanged at that period and the return time of the exchanged energy. The negotiating prosumers navigate through a common negotiation domain consisting of potential energy contracts and evaluate those contracts from their valuations on the entailed criteria against a utility function that is robust against generation and demand uncertainty. From the repeated interactions, a prosumer gradually learns about the compatibility of its peers in reaching energy contracts that are closer to Nash solutions. Empirical evaluation on real demand, generation and storage profiles – in multiple system scales – illustrates that the proposed negotiation based strategy can increase the system efficiency (measured by utilitarian social welfare) and fairness (measured by Nash social welfare) over a baseline strategy and an individual flexibility control strategy representing the status quo strategy. We thus elicit system benefits from peer-to-peer flexibility exchange already without any central coordination and market operator, providing a simple yet flexible and effective paradigm that complements existing markets.

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  • Chakraborty, Shantanu & Baarslag, Tim & Kaisers, Michael, 2020. "Automated peer-to-peer negotiation for energy contract settlements in residential cooperatives," Applied Energy, Elsevier, vol. 259(C).
    • Handle: RePEc:eee:appene:v:259:y:2020:i:c:s0306261919318604
    DOI: 10.1016/j.apenergy.2019.114173
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    10. Tushar, Wayes & Yuen, Chau & Saha, Tapan K. & Morstyn, Thomas & Chapman, Archie C. & Alam, M. Jan E. & Hanif, Sarmad & Poor, H. Vincent, 2021. "Peer-to-peer energy systems for connected communities: A review of recent advances and emerging challenges," Applied Energy, Elsevier, vol. 282(PA).
    11. Lee, Minwoo & Han, Changho & Kwon, Soonbum & Kim, Yongchan, 2023. "Energy and cost savings through heat trading between two massive prosumers using solar and ground energy systems connected to district heating networks," Energy, Elsevier, vol. 284(C).
    12. 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).
    13. Piotr F. Borowski, 2020. "Zonal and Nodal Models of Energy Market in European Union," Energies, MDPI, vol. 13(16), pages 1-21, August.
    14. 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).
    15. Shama Naz Islam, 2024. "A Review of Peer-to-Peer Energy Trading Markets: Enabling Models and Technologies," Energies, MDPI, vol. 17(7), pages 1-18, April.
    16. Gjorgievski, Vladimir Z. & Cundeva, Snezana & Markovska, Natasa & Georghiou, George E., 2022. "Virtual net-billing: A fair energy sharing method for collective self-consumption," Energy, Elsevier, vol. 254(PB).
    17. Shama Naz Islam & Aiswarya Sivadas, 2022. "Optimisation of Buyer and Seller Preferences for Peer-to-Peer Energy Trading in a Microgrid," Energies, MDPI, vol. 15(12), pages 1-29, June.
    18. Mehdi Montakhabi & Ine Van Zeeland & Pieter Ballon, 2022. "Barriers for Prosumers’ Open Business Models: A Resource-Based View on Assets and Data-Sharing in Electricity Markets," Sustainability, MDPI, vol. 14(9), pages 1-29, May.
    19. 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).

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