Peer-to-Peer Local Energy Markets: A Low-Cost Flexible Solution for Energizing Sustainable Smart Cities

Abstract

The proliferation of the distributed energy resources (DERs) into the demand side of the grid has led to the creation of a new agent, called prosumer at the distribution level. Prosumers are active agents that are able to produce, consume, and store energy. The concept of peer-to-peer (P2P) energy markets makes a new framework for such agents to perform direct energy transactions with other peers in the network. Moreover, by implementing proper mechanisms, such markets might also be employed to procure flexible services from the prosumers. Hence, designing an efficient P2P market that benefits both the grid and customers has gained significant attention in recent years. In this chapter, various structures for a P2P market are investigated and how these designs would be able to activate flexibility in the smart cities described. First, an overview of the P2P-based design of transactive energy markets and their contribution to the flexibility procurement in smart cities is investigated. Afterward, each design is discussed in detail while covering different approaches along with the elements and technologies behind them. The conceptual design of each structure would support the researchers and scholars in the area to have an in-depth understanding of the subject. Moreover, evaluating challenges of particular designs and introducing pilot projects give readers a deep understanding of practical use cases of proposed approaches for implementing them in real-world applications.