IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v261y2020ics0306261919320227.html
   My bibliography  Save this article

Determining the Peer-to-Peer electricity trading price and strategy for energy prosumers and consumers within a microgrid

Author

Listed:
  • An, Jongbaek
  • Lee, Minhyun
  • Yeom, Seungkeun
  • Hong, Taehoon

Abstract

A successful Peer-to-Peer (P2P) electricity trading within a microgrid requires a P2P electricity trading price and strategy that enable both energy prosumers and consumers to obtain profits. Therefore, this study aims to propose a P2P electricity trading strategy based on the minimum and maximum electricity trading prices for energy prosumers and consumers that ensure their profitability, by considering the actual electricity market structure in South Korea. Towards this end, the minimum and maximum electricity trading prices for energy prosumers and consumers were calculated based on the market participation conditions and electricity trading scenarios established in this study. By matching energy prosumers and consumers based on the calculated minimum and maximum electricity trading prices, a P2P electricity trading strategy was ultimately proposed. As a result, the minimum (i.e., US$0.05–0.34/kWh) and maximum (i.e., US$0.09–0.32/kWh) electricity trading prices increased as the monthly electricity consumption of energy prosumers and consumers increased and the self-consumption and electricity purchase rates decreased. Consequently, the profitable electricity trading scenarios increased as the monthly electricity consumption was lower and the self-consumption rate was higher for energy prosumers, and as the monthly electricity consumption was higher and the electricity purchase rate was lower for energy consumers. In particular, the P2P electricity trading can provide maximum profits to energy prosumers and consumers when the monthly electricity consumption of energy prosumers is 200 kWh, the monthly electricity consumption of energy consumers is 500 kWh, and the electricity purchase rate is 20%. Based on the findings of this study, it is possible not only to determine profitable P2P electricity trading prices to market participants but also to establish an optimal P2P electricity trading strategy by matching energy prosumers and consumers that can ensure them with maximum profits.

Suggested Citation

  • An, Jongbaek & Lee, Minhyun & Yeom, Seungkeun & Hong, Taehoon, 2020. "Determining the Peer-to-Peer electricity trading price and strategy for energy prosumers and consumers within a microgrid," Applied Energy, Elsevier, vol. 261(C).
    • Handle: RePEc:eee:appene:v:261:y:2020:i:c:s0306261919320227
    DOI: 10.1016/j.apenergy.2019.114335
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261919320227
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2019.114335?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. Lee, Minhyun & Hong, Taehoon & Jeong, Kwangbok & Kim, Jimin, 2018. "A bottom-up approach for estimating the economic potential of the rooftop solar photovoltaic system considering the spatial and temporal diversity," Applied Energy, Elsevier, vol. 232(C), pages 640-656.
    2. Mengelkamp, Esther & Gärttner, Johannes & Rock, Kerstin & Kessler, Scott & Orsini, Lawrence & Weinhardt, Christof, 2018. "Designing microgrid energy markets," Applied Energy, Elsevier, vol. 210(C), pages 870-880.
    3. Branker, K. & Pathak, M.J.M. & Pearce, J.M., 2011. "A review of solar photovoltaic levelized cost of electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4470-4482.
    4. Diestelmeier, Lea, 2019. "Changing power: Shifting the role of electricity consumers with blockchain technology – Policy implications for EU electricity law," Energy Policy, Elsevier, vol. 128(C), pages 189-196.
    5. Swift, Kenton D., 2013. "A comparison of the cost and financial returns for solar photovoltaic systems installed by businesses in different locations across the United States," Renewable Energy, Elsevier, vol. 57(C), pages 137-143.
    6. Chen, Kaixuan & Lin, Jin & Song, Yonghua, 2019. "Trading strategy optimization for a prosumer in continuous double auction-based peer-to-peer market: A prediction-integration model," Applied Energy, Elsevier, vol. 242(C), pages 1121-1133.
    7. Burns, John Edward & Kang, Jin-Su, 2012. "Comparative economic analysis of supporting policies for residential solar PV in the United States: Solar Renewable Energy Credit (SREC) potential," Energy Policy, Elsevier, vol. 44(C), pages 217-225.
    8. 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)

    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. An, Jongbaek & Hong, Taehoon & Lee, Minhyun, 2022. "Determining the optimal trading price of electricity for energy consumers and prosumers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 154(C).
    2. Siripha Junlakarn & Phimsupha Kokchang & Kulyos Audomvongseree, 2022. "Drivers and Challenges of Peer-to-Peer Energy Trading Development in Thailand," Energies, MDPI, vol. 15(3), pages 1-25, February.
    3. Zhou, Yue & Wu, Jianzhong & Song, Guanyu & Long, Chao, 2020. "Framework design and optimal bidding strategy for ancillary service provision from a peer-to-peer energy trading community," Applied Energy, Elsevier, vol. 278(C).
    4. 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.
    5. 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).
    6. Lee, Minhyun & Hong, Taehoon & Yoo, Hyunji & Koo, Choongwan & Kim, Jimin & Jeong, Kwangbok & Jeong, Jaewook & Ji, Changyoon, 2017. "Establishment of a base price for the Solar Renewable Energy Credit (SREC) from the perspective of residents and state governments in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 1066-1080.
    7. Lee, Minhyun & Hong, Taehoon & Koo, Choongwan, 2016. "An economic impact analysis of state solar incentives for improving financial performance of residential solar photovoltaic systems in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 590-607.
    8. 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).
    9. Kim, Hakpyeong & Choi, Heeju & Kang, Hyuna & An, Jongbaek & Yeom, Seungkeun & Hong, Taehoon, 2021. "A systematic review of the smart energy conservation system: From smart homes to sustainable smart cities," Renewable and Sustainable Energy Reviews, Elsevier, vol. 140(C).
    10. Xu, Shuang & Zhao, Yong & Li, Yuanzheng & Zhou, Yue, 2021. "An iterative uniform-price auction mechanism for peer-to-peer energy trading in a community microgrid," Applied Energy, Elsevier, vol. 298(C).
    11. Li, Zhenpeng & Ma, Tao, 2020. "Peer-to-peer electricity trading in grid-connected residential communities with household distributed photovoltaic," Applied Energy, Elsevier, vol. 278(C).
    12. Yoo, Hyunji & Hong, Taehoon & Jeong, Kwangbok & Ji, Changyoon, 2018. "Estimation of the optimal government rebate for promoting the photovoltaic system in multi-family housing complexes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 720-728.
    13. Kirchhoff, Hannes & Strunz, Kai, 2019. "Key drivers for successful development of peer-to-peer microgrids for swarm electrification," Applied Energy, Elsevier, vol. 244(C), pages 46-62.
    14. Lee, Juyong & Cho, Youngsang, 2020. "Estimation of the usage fee for peer-to-peer electricity trading platform: The case of South Korea," Energy Policy, Elsevier, vol. 136(C).
    15. Rômulo de Oliveira Azevêdo & Paulo Rotela Junior & Luiz Célio Souza Rocha & Gianfranco Chicco & Giancarlo Aquila & Rogério Santana Peruchi, 2020. "Identification and Analysis of Impact Factors on the Economic Feasibility of Photovoltaic Energy Investments," Sustainability, MDPI, vol. 12(17), pages 1-40, September.
    16. Alafita, T. & Pearce, J.M., 2014. "Securitization of residential solar photovoltaic assets: Costs, risks and uncertainty," Energy Policy, Elsevier, vol. 67(C), pages 488-498.
    17. Nieta, Agustín A. Sánchez de la & Ilieva, Iliana & Gibescu, Madeleine & Bremdal, Bernt & Simonsen, Stig & Gramme, Eivind, 2021. "Optimal midterm peak shaving cost in an electricity management system using behind customers’ smart meter configuration," Applied Energy, Elsevier, vol. 283(C).
    18. 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).
    19. Castellini, Marta & Menoncin, Francesco & Moretto, Michele & Vergalli, Sergio, 2021. "Photovoltaic Smart Grids in the prosumers investment decisions: a real option model," Journal of Economic Dynamics and Control, Elsevier, vol. 126(C).
    20. Cortade, Thomas & Poudou, Jean-Christophe, 2022. "Peer-to-peer energy platforms: Incentives for prosuming," Energy Economics, Elsevier, vol. 109(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:261:y:2020:i:c:s0306261919320227. 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.