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P2P credit auction vs. net metering: Benefit analysis for prosumers under incremental block rate electricity tariff

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  • Park, Jung-Sung
  • Kim, Seung Wan
  • Lee, Ji Woo

Abstract

In order to increase the economic benefits of residential photovoltaic (PV), many countries have considered diverse compensation policies for surplus energy, such as fixed feed-in tariff, time-varying feed-in tariff, and net metering, where the surplus energy is offset against consumption. More recently, there has been a growing interest in schemes that allow end-users to trade surplus energy via peer-to-peer (P2P) electricity trading, rather than relying on government incentives. This study conducts a quantitative analysis of on how the introduction of P2P trading affects the benefits of each stakeholder, offering a guide for policy adoption. Firstly, this study devises a P2P trading mechanism based on credit auctions tailored for residential, while considering the application of the increasing block rate tariff often applied to residential customers in the real world, and assesses its benefits in comparison to the current net metering scheme. Multiple case studies were undertaken, encompassing various scenarios, including the level of purchase price of utility for uncleared auction offers, the proportion of prosumers participating in the trading network, and the level of capacity of PV. This study shows that the P2P trading does not always yield positive benefits for prosumers compared to the prior policy. Nevertheless, this study identifies specific conditions under which the P2P trading can stimulate residential PV installations.

Suggested Citation

  • Park, Jung-Sung & Kim, Seung Wan & Lee, Ji Woo, 2024. "P2P credit auction vs. net metering: Benefit analysis for prosumers under incremental block rate electricity tariff," Applied Energy, Elsevier, vol. 364(C).
    • Handle: RePEc:eee:appene:v:364:y:2024:i:c:s0306261924004781
    DOI: 10.1016/j.apenergy.2024.123095
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    References listed on IDEAS

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    2. Pillai, Gobind G. & Putrus, Ghanim A. & Georgitsioti, Tatiani & Pearsall, Nicola M., 2014. "Near-term economic benefits from grid-connected residential PV (photovoltaic) systems," Energy, Elsevier, vol. 68(C), pages 832-843.
    3. Lin, Jason & Pipattanasomporn, Manisa & Rahman, Saifur, 2019. "Comparative analysis of auction mechanisms and bidding strategies for P2P solar transactive energy markets," Applied Energy, Elsevier, vol. 255(C).
    4. 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).
    5. Singh, Kamini & Gadh, Rajit & Singh, Anoop & Lal Dewangan, Chaman, 2022. "Design of an optimal P2P energy trading market model using bilevel stochastic optimization," Applied Energy, Elsevier, vol. 328(C).
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