Local Energy Markets in LV Networks: Community Based and Decentralized P2P Approaches

Abstract

The rapid deployment of distributed energy resources (DERs) along with the advances in information and communication technology have led to an increased interest in energy trading at the local level. This paper explores the particular properties of developing local energy trading schemes in low-voltage networks by comparing two different approaches, which obviate many of the challenges of local energy markets (LEMs). First, a community-based approach which aims to maximize the social welfare by solving distribution optimal power flow (DOPF) problem, is presented. Second, a decentralized peer-to-peer model with self-interested users is introduced. The two approaches are tested on a UK low-voltage network. The results show the main features of each approach and demonstrate the importance of advancing the understanding of LEMs.