IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v14y2021i11p3229-d566641.html
   My bibliography  Save this article

Framework to Facilitate Electricity and Flexibility Trading within, to, and from Local Markets

Author

Listed:
  • Salla Annala

    (School of Energy Systems, LUT University, Yliopistonkatu 34, 53850 Lappeenranta, Finland)

  • Lurian Klein

    (Virtual Power Solutions—A Cleanwatts Company, Ladeira da Paula 6, 3040-574 Coimbra, Portugal
    MIT Portugal Programme, Energy for Sustainability Initiative, University of Coimbra, 3030-194 Coimbra, Portugal)

  • Luisa Matos

    (Virtual Power Solutions—A Cleanwatts Company, Ladeira da Paula 6, 3040-574 Coimbra, Portugal
    DEGEIT, Campus Universitário de Santiago, University of Aveiro, 3810-193 Aveiro, Portugal)

  • Sirpa Repo

    (Enerim Oy, Valimotie 9-11, 00380 Helsinki, Finland
    Technology and Communication Sciences, Electrical Engineering, Tampere University, Korkeakoulunkatu 7, 33720 Tampere, Finland)

  • Olli Kilkki

    (Enerim Oy, Valimotie 9-11, 00380 Helsinki, Finland)

  • Arun Narayanan

    (School of Energy Systems, LUT University, Yliopistonkatu 34, 53850 Lappeenranta, Finland)

  • Samuli Honkapuro

    (School of Energy Systems, LUT University, Yliopistonkatu 34, 53850 Lappeenranta, Finland)

Abstract

Peer-to-peer (P2P) electricity sharing or trading can empower consumers and prosumers, incentivize the balancing of generation and demand locally, increase system resilience and reliability, and help in achieving societal goals, such as increasing renewable energy penetration. Nevertheless, the development of P2P trading in actual environments has been slow due to the unclear position of P2P markets in the power system. Recent developments in the European legislation are promising for the establishment of P2P markets and energy communities. Hence, the interplay between local trading and existing market structures needs to be addressed carefully. Furthermore, P2P trading with distributed resources presumes that electricity end users will become active players in the power system. This paper proposes a bidding and pricing mechanism for local markets, considering the external markets; a new approach to balance settlement and balance responsibility when local trading occurs; and an interface to promote end-user interest in, and interactions with, local energy trading. The proposed local market concept and interface solution promote the coupling between local and existing retail, wholesale and ancillary service markets, and can be seen as a step towards the establishment of local energy markets in real-life settings.

Suggested Citation

  • Salla Annala & Lurian Klein & Luisa Matos & Sirpa Repo & Olli Kilkki & Arun Narayanan & Samuli Honkapuro, 2021. "Framework to Facilitate Electricity and Flexibility Trading within, to, and from Local Markets," Energies, MDPI, vol. 14(11), pages 1-20, May.
  • Handle: RePEc:gam:jeners:v:14:y:2021:i:11:p:3229-:d:566641
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/14/11/3229/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/1996-1073/14/11/3229/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Han, Dong & Zhang, Chengzhenghao & Ping, Jian & Yan, Zheng, 2020. "Smart contract architecture for decentralized energy trading and management based on blockchains," Energy, Elsevier, vol. 199(C).
    2. Ableitner, Liliane & Tiefenbeck, Verena & Meeuw, Arne & Wörner, Anselma & Fleisch, Elgar & Wortmann, Felix, 2020. "User behavior in a real-world peer-to-peer electricity market," Applied Energy, Elsevier, vol. 270(C).
    3. Peter Cramton, 2017. "Electricity market design," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 33(4), pages 589-612.
    4. Di Somma, M. & Graditi, G. & Heydarian-Forushani, E. & Shafie-khah, M. & Siano, P., 2018. "Stochastic optimal scheduling of distributed energy resources with renewables considering economic and environmental aspects," Renewable Energy, Elsevier, vol. 116(PA), pages 272-287.
    5. Angelo Facchini, 2017. "Distributed energy resources: Planning for the future," Nature Energy, Nature, vol. 2(8), pages 1-2, August.
    6. Akorede, Mudathir Funsho & Hizam, Hashim & Pouresmaeil, Edris, 2010. "Distributed energy resources and benefits to the environment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(2), pages 724-734, February.
    7. Michael H. Rothkopf, 2007. "Thirteen Reasons Why the Vickrey-Clarke-Groves Process Is Not Practical," Operations Research, INFORMS, vol. 55(2), pages 191-197, April.
    8. Foumani, Mehdi & Smith-Miles, Kate, 2019. "The impact of various carbon reduction policies on green flowshop scheduling," Applied Energy, Elsevier, vol. 249(C), pages 300-315.
    9. 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).
    10. Sousa, Tiago & Soares, Tiago & Pinson, Pierre & Moret, Fabio & Baroche, Thomas & Sorin, Etienne, 2019. "Peer-to-peer and community-based markets: A comprehensive review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 104(C), pages 367-378.
    11. Heiskanen, Eva & Johnson, Mikael & Robinson, Simon & Vadovics, Edina & Saastamoinen, Mika, 2010. "Low-carbon communities as a context for individual behavioural change," Energy Policy, Elsevier, vol. 38(12), pages 7586-7595, December.
    12. Klein, Lurian P. & Matos, Luisa M. & Allegretti, Giovanni, 2020. "A pragmatic approach towards end-user engagement in the context of peer-to-peer energy sharing," Energy, Elsevier, vol. 205(C).
    13. 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.
    14. Tsao, Yu-Chung & Thanh, Vo-Van, 2021. "Toward sustainable microgrids with blockchain technology-based peer-to-peer energy trading mechanism: A fuzzy meta-heuristic approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 136(C).
    15. Say, Kelvin & John, Michele & Dargaville, Roger & Wills, Raymond T., 2018. "The coming disruption: The movement towards the customer renewable energy transition," Energy Policy, Elsevier, vol. 123(C), pages 737-748.
    16. Johansson, Petter & Vendel, Martin & Nuur, Cali, 2020. "Integrating distributed energy resources in electricity distribution systems: An explorative study of challenges facing DSOs in Sweden," Utilities Policy, Elsevier, vol. 67(C).
    17. Lurian Pires Klein & Aleksandra Krivoglazova & Luisa Matos & Jorge Landeck & Manuel de Azevedo, 2019. "A Novel Peer-To-Peer Energy Sharing Business Model for the Portuguese Energy Market," Energies, MDPI, vol. 13(1), pages 1-20, December.
    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. Ádám Sleisz & Dániel Divényi & Beáta Polgári & Péter Sőrés & Dávid Raisz, 2022. "A Novel Cost Allocation Mechanism for Local Flexibility in the Power System with Partial Disintermediation," Energies, MDPI, vol. 15(22), pages 1-18, November.

    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. 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.
    2. 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).
    3. Sophie Adams & Donal Brown & Juan Pablo Cárdenas Álvarez & Ruzanna Chitchyan & Michael J. Fell & Ulf J. J. Hahnel & Kristina Hojckova & Charlotte Johnson & Lurian Klein & Mehdi Montakhabi & Kelvin Say, 2021. "Social and Economic Value in Emerging Decentralized Energy Business Models: A Critical Review," Energies, MDPI, vol. 14(23), pages 1-29, November.
    4. Ma, Li & Wang, Lingfeng & Liu, Zhaoxi, 2021. "Multi-level trading community formation and hybrid trading network construction in local energy market," Applied Energy, Elsevier, vol. 285(C).
    5. Maarten Wolsink, 2020. "Framing in Renewable Energy Policies: A Glossary," Energies, MDPI, vol. 13(11), pages 1-31, June.
    6. 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).
    7. 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).
    8. Chen, Liudong & Liu, Nian & Li, Chenchen & Zhang, Silu & Yan, Xiaohe, 2021. "Peer-to-peer energy sharing with dynamic network structures," Applied Energy, Elsevier, vol. 291(C).
    9. 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).
    10. Ahl, Amanda & Goto, Mika & Yarime, Masaru & Tanaka, Kenji & Sagawa, Daishi, 2022. "Challenges and opportunities of blockchain energy applications: Interrelatedness among technological, economic, social, environmental, and institutional dimensions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 166(C).
    11. 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).
    12. Hahnel, Ulf J.J. & Fell, Michael J., 2022. "Pricing decisions in peer-to-peer and prosumer-centred electricity markets: Experimental analysis in Germany and the United Kingdom," Renewable and Sustainable Energy Reviews, Elsevier, vol. 162(C).
    13. 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).
    14. Longjian Piao & Laurens de Vries & Mathijs de Weerdt & Neil Yorke-Smith, 2019. "Electricity Markets for DC Distribution Systems: Design Options," Energies, MDPI, vol. 12(14), pages 1-16, July.
    15. Kirli, Desen & Couraud, Benoit & Robu, Valentin & Salgado-Bravo, Marcelo & Norbu, Sonam & Andoni, Merlinda & Antonopoulos, Ioannis & Negrete-Pincetic, Matias & Flynn, David & Kiprakis, Aristides, 2022. "Smart contracts in energy systems: A systematic review of fundamental approaches and implementations," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    16. Wang, Longze & Jiao, Shucen & Xie, Yu & Xia, Shiwei & Zhang, Delong & Zhang, Yan & Li, Meicheng, 2022. "Two-way dynamic pricing mechanism of hydrogen filling stations in electric-hydrogen coupling system enhanced by blockchain," Energy, Elsevier, vol. 239(PC).
    17. Zheng, Boshen & Wei, Wei & Chen, Yue & Wu, Qiuwei & Mei, Shengwei, 2022. "A peer-to-peer energy trading market embedded with residential shared energy storage units," Applied Energy, Elsevier, vol. 308(C).
    18. Marie-Louise Arlt & David P. Chassin & L. Lynne Kiesling, 2021. "Opening Up Transactive Systems: Introducing TESS and Specification in a Field Deployment," Energies, MDPI, vol. 14(13), pages 1-22, July.
    19. Kobashi, Takuro & Yoshida, Takahiro & Yamagata, Yoshiki & Naito, Katsuhiko & Pfenninger, Stefan & Say, Kelvin & Takeda, Yasuhiro & Ahl, Amanda & Yarime, Masaru & Hara, Keishiro, 2020. "On the potential of “Photovoltaics + Electric vehicles” for deep decarbonization of Kyoto’s power systems: Techno-economic-social considerations," Applied Energy, Elsevier, vol. 275(C).
    20. Reis, Inês F.G. & Gonçalves, Ivo & Lopes, Marta A.R. & Antunes, Carlos Henggeler, 2022. "Towards inclusive community-based energy markets: A multiagent framework," Applied Energy, Elsevier, vol. 307(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:gam:jeners:v:14:y:2021:i:11:p:3229-:d:566641. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.