IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v306y2024ics0360544224022321.html
   My bibliography  Save this article

Expediting battery investment returns for residential customers utilising spot price-aware local energy exchanges

Author

Listed:
  • Ali, Liaqat
  • Azim, M. Imran
  • Peters, Jan
  • Pashajavid, Ehsan

Abstract

This paper presents a local energy exchange mechanism to benefit residential customers and retailers under variable wholesale market spot prices. To do so, a peer-to-peer (P2P) trading-enabled local energy market (LEM) is proposed to facilitate frequent energy transactions among participants. The proposed LEM mechanism considers market operational constraints and maximises electricity cost reductions. Further, the proposed LEM optimises the customers' investment return for battery energy storage systems (BESSs) and minimises retailers’ financial losses during higher spot prices in the wholesale market. Finally, a case study is demonstrated using real-world Australian data in which P2P trading is performed between interested buyers and sellers. Two scenarios with high and low wholesale market spot prices are analysed comprehensively considering five metrics such as solar-to-spot (STS); solar-to-load (STL); forward buy contract (FBC)-to-load (FBC-L); spot-to-load (Short); and FBC-to-spot (Long). The simulation results reveal that the customers reap substantial benefits from the proposed LEM in contrast with business-as-usual (BAU), allowing them to expedite BESS investment returns. Also, the proposed LEM helps a retailer decrease the effect of higher spot prices by reducing its unexpected financial losses while improving self-consumption and self-sufficiency in the local energy network.

Suggested Citation

  • Ali, Liaqat & Azim, M. Imran & Peters, Jan & Pashajavid, Ehsan, 2024. "Expediting battery investment returns for residential customers utilising spot price-aware local energy exchanges," Energy, Elsevier, vol. 306(C).
    • Handle: RePEc:eee:energy:v:306:y:2024:i:c:s0360544224022321
    DOI: 10.1016/j.energy.2024.132458
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544224022321
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2024.132458?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. Pol Olivella-Rosell & Pau Lloret-Gallego & Íngrid Munné-Collado & Roberto Villafafila-Robles & Andreas Sumper & Stig Ødegaard Ottessen & Jayaprakash Rajasekharan & Bernt A. Bremdal, 2018. "Local Flexibility Market Design for Aggregators Providing Multiple Flexibility Services at Distribution Network Level," Energies, MDPI, vol. 11(4), pages 1-19, April.
    2. 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).
    3. Niesr, 2024. "National Institute Global Economic Outlook – Summary," National Institute Global Economic Outlook, National Institute of Economic and Social Research, issue 13, pages 4-6.
    4. Neves, Diana & Scott, Ian & Silva, Carlos A., 2020. "Peer-to-peer energy trading potential: An assessment for the residential sector under different technology and tariff availabilities," Energy, Elsevier, vol. 205(C).
    5. Huang, Pei & Lovati, Marco & Zhang, Xingxing & Bales, Chris & Hallbeck, Sven & Becker, Anders & Bergqvist, Henrik & Hedberg, Jan & Maturi, Laura, 2019. "Transforming a residential building cluster into electricity prosumers in Sweden: Optimal design of a coupled PV-heat pump-thermal storage-electric vehicle system," Applied Energy, Elsevier, vol. 255(C).
    6. Niesr, 2024. "National Institute UK Economic Outlook Summer 2024," National Institute UK Economic Outlook, National Institute of Economic and Social Research, issue 15, pages 5-6.
    7. Iria, José & Soares, Filipe & Matos, Manuel, 2018. "Optimal supply and demand bidding strategy for an aggregator of small prosumers," Applied Energy, Elsevier, vol. 213(C), pages 658-669.
    8. Esmaeili Aliabadi, Danial & Kaya, Murat & Sahin, Guvenc, 2017. "Competition, risk and learning in electricity markets: An agent-based simulation study," Applied Energy, Elsevier, vol. 195(C), pages 1000-1011.
    9. Mariza P. Oliveira-Roza & Roberto A. Cecílio & David B. S. Teixeira & Michel C. Moreira & André Q. Almeida & Alexandre C. Xavier & Sidney S. Zanetti, 2024. "Rainfall Erosivity over Brazil: A Large National Database," Data, MDPI, vol. 9(10), pages 1-9, October.
    10. Haider, Sajjad & Rizvi, Rida e Zahra & Walewski, John & Schegner, Peter, 2022. "Investigating peer-to-peer power transactions for reducing EV induced network congestion," Energy, Elsevier, vol. 254(PB).
    11. Huang, Zhijia & Wang, Fang & Lu, Yuehong & Chen, Xiaofeng & Wu, Qiqi, 2023. "Optimization model for home energy management system of rural dwellings," Energy, Elsevier, vol. 283(C).
    12. Bian, Yifan & Xie, Lirong & Ye, Jiahao & Ma, Lan & Cui, Chuanshi, 2024. "Peer-to-peer energy sharing model considering multi-objective optimal allocation of shared energy storage in a multi-microgrid system," Energy, Elsevier, vol. 288(C).
    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. Faia, Ricardo & Lezama, Fernando & Soares, João & Pinto, Tiago & Vale, Zita, 2024. "Local electricity markets: A review on benefits, barriers, current trends and future perspectives," Renewable and Sustainable Energy Reviews, Elsevier, vol. 190(PA).
    2. Hussain, Sadam & Azim, M. Imran & Lai, Chunyan & Eicker, Ursula, 2023. "New coordination framework for smart home peer-to-peer trading to reduce impact on distribution transformer," Energy, Elsevier, vol. 284(C).
    3. Chen, Yujia & Pei, Wei & Ma, Tengfei & Xiao, Hao, 2023. "Asymmetric Nash bargaining model for peer-to-peer energy transactions combined with shared energy storage," Energy, Elsevier, vol. 278(PB).
    4. 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).
    5. Okur, Özge & Heijnen, Petra & Lukszo, Zofia, 2021. "Aggregator’s business models in residential and service sectors: A review of operational and financial aspects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 139(C).
    6. Wang, Zibo & Dong, Lei & Shi, Mengjie & Qiao, Ji & Jia, Hongjie & Mu, Yunfei & Pu, Tianjiao, 2023. "Market power modeling and restraint of aggregated prosumers in peer-to-peer energy trading: A game-theoretic approach," Applied Energy, Elsevier, vol. 348(C).
    7. Karim L. Anaya & Michael G. Pollitt, 2021. "How to Procure Flexibility Services within the Electricity Distribution System: Lessons from an International Review of Innovation Projects," Energies, MDPI, vol. 14(15), pages 1-26, July.
    8. Johannes Dahlke & Kristina Bogner & Matthias Mueller & Thomas Berger & Andreas Pyka & Bernd Ebersberger, 2020. "Is the Juice Worth the Squeeze? Machine Learning (ML) In and For Agent-Based Modelling (ABM)," Papers 2003.11985, arXiv.org.
    9. Tang, Rui & Li, Hangxin & Wang, Shengwei, 2019. "A game theory-based decentralized control strategy for power demand management of building cluster using thermal mass and energy storage," Applied Energy, Elsevier, vol. 242(C), pages 809-820.
    10. Zhou, Yuekuan & Lund, Peter D., 2023. "Peer-to-peer energy sharing and trading of renewable energy in smart communities ─ trading pricing models, decision-making and agent-based collaboration," Renewable Energy, Elsevier, vol. 207(C), pages 177-193.
    11. Md. Mosaraf Hossain Khan & Amran Hossain & Aasim Ullah & Molla Shahadat Hossain Lipu & S. M. Shahnewaz Siddiquee & M. Shafiul Alam & Taskin Jamal & Hafiz Ahmed, 2021. "Integration of Large-Scale Electric Vehicles into Utility Grid: An Efficient Approach for Impact Analysis and Power Quality Assessment," Sustainability, MDPI, vol. 13(19), pages 1-18, October.
    12. Theo Dronne & Fabien Roques & Marcelo Saguan, 2021. "Local Flexibility Markets for Distribution Network Congestion-Management in Center-Western Europe: Which Design for Which Needs?," Energies, MDPI, vol. 14(14), pages 1-18, July.
    13. Kılkış, Şiir & Ulpiani, Giulia & Vetters, Nadja, 2024. "Visions for climate neutrality and opportunities for co-learning in European cities," Renewable and Sustainable Energy Reviews, Elsevier, vol. 195(C).
    14. Benioudakis, Myron & Zissis, Dimitris & Burnetas, Apostolos & Ioannou, George, 2023. "Service provision on an aggregator platform with time-sensitive customers: Pricing strategies and coordination," International Journal of Production Economics, Elsevier, vol. 257(C).
    15. Zhou, Yuekuan & Cao, Sunliang & Hensen, Jan L.M., 2021. "An energy paradigm transition framework from negative towards positive district energy sharing networks—Battery cycling aging, advanced battery management strategies, flexible vehicles-to-buildings in," Applied Energy, Elsevier, vol. 288(C).
    16. Yang, Yuyan & Xu, Xiao & Pan, Li & Liu, Junyong & Liu, Jichun & Hu, Weihao, 2024. "Distributed prosumer trading in the electricity and carbon markets considering user utility," Renewable Energy, Elsevier, vol. 228(C).
    17. Li, Yanxue & Zhang, Xiaoyi & Gao, Weijun & Xu, Wenya & Wang, Zixuan, 2022. "Operational performance and grid-support assessment of distributed flexibility practices among residential prosumers under high PV penetration," Energy, Elsevier, vol. 238(PB).
    18. Gheouany, Saad & Ouadi, Hamid & El Bakali, Saida, 2024. "Optimal active and reactive energy management for a smart microgrid system under the Moroccan grid pricing code," Energy, Elsevier, vol. 306(C).
    19. Mehdinejad, Mehdi & Shayanfar, Heidarali & Mohammadi-Ivatloo, Behnam, 2022. "Decentralized blockchain-based peer-to-peer energy-backed token trading for active prosumers," Energy, Elsevier, vol. 244(PA).
    20. Park, Sung-Won & Son, Sung-Yong, 2023. "Techno-economic analysis for the electric vehicle battery aging management of charge point operator," Energy, Elsevier, vol. 280(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:energy:v:306:y:2024:i:c:s0360544224022321. 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.journals.elsevier.com/energy .

    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.