Exogenous Cost Allocation in Peer-to-Peer Electricity Markets

Thomas Baroche*, Pierre Pinson, Roman Le Goff Latimier, Hamid Ben Ahmed

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

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Abstract

The deployment of distributed energy resources, combined with a more proactive demand side management, is inducing a new paradigm in power system operation and electricity markets. Within a consumer-centric market framework, peer-to-peer approaches have gained substantial interest. Peer-to-peer markets rely on multi-bilateral negotiation among all agents to match supply and demand. These markets can yield a complete mapping of exchanges onto the grid, hence allowing to rethink the sharing of costs related to the use of common infrastructure and services. We propose here to attribute such costs through exogenous network charges in several alternative ways i.e. uniformly, based on the electrical distance between agents and by zones. This variety covers the main grid physical and regulatory configurations. Since attribution mechanisms are defined in an exogenous manner to affect each P2P trade, they eventually shift the market issue to cover the grid exploitation costs. It can even be used to release the stress on the grid when necessary. The interest of our approach is illustrated on a test case using the IEEE 39 bus test system, underlying the impact of attribution mechanisms on trades and grid usage.
Original languageEnglish
JournalIEEE Transactions on Power Systems
Volume34
Issue number4
Pages (from-to)2553-2564
Number of pages12
ISSN0885-8950
DOIs
Publication statusPublished - 2019

Keywords

  • Economic dispatch
  • Distributed optimization
  • Optimal power flow
  • Cost allocation

Cite this

Baroche, Thomas ; Pinson, Pierre ; Le Goff Latimier, Roman ; Ben Ahmed, Hamid. / Exogenous Cost Allocation in Peer-to-Peer Electricity Markets. In: IEEE Transactions on Power Systems. 2019 ; Vol. 34, No. 4. pp. 2553-2564.
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Exogenous Cost Allocation in Peer-to-Peer Electricity Markets. / Baroche, Thomas; Pinson, Pierre; Le Goff Latimier, Roman; Ben Ahmed, Hamid.

In: IEEE Transactions on Power Systems, Vol. 34, No. 4, 2019, p. 2553-2564.

Research output: Contribution to journalJournal articleResearchpeer-review

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N2 - The deployment of distributed energy resources, combined with a more proactive demand side management, is inducing a new paradigm in power system operation and electricity markets. Within a consumer-centric market framework, peer-to-peer approaches have gained substantial interest. Peer-to-peer markets rely on multi-bilateral negotiation among all agents to match supply and demand. These markets can yield a complete mapping of exchanges onto the grid, hence allowing to rethink the sharing of costs related to the use of common infrastructure and services. We propose here to attribute such costs through exogenous network charges in several alternative ways i.e. uniformly, based on the electrical distance between agents and by zones. This variety covers the main grid physical and regulatory configurations. Since attribution mechanisms are defined in an exogenous manner to affect each P2P trade, they eventually shift the market issue to cover the grid exploitation costs. It can even be used to release the stress on the grid when necessary. The interest of our approach is illustrated on a test case using the IEEE 39 bus test system, underlying the impact of attribution mechanisms on trades and grid usage.

AB - The deployment of distributed energy resources, combined with a more proactive demand side management, is inducing a new paradigm in power system operation and electricity markets. Within a consumer-centric market framework, peer-to-peer approaches have gained substantial interest. Peer-to-peer markets rely on multi-bilateral negotiation among all agents to match supply and demand. These markets can yield a complete mapping of exchanges onto the grid, hence allowing to rethink the sharing of costs related to the use of common infrastructure and services. We propose here to attribute such costs through exogenous network charges in several alternative ways i.e. uniformly, based on the electrical distance between agents and by zones. This variety covers the main grid physical and regulatory configurations. Since attribution mechanisms are defined in an exogenous manner to affect each P2P trade, they eventually shift the market issue to cover the grid exploitation costs. It can even be used to release the stress on the grid when necessary. The interest of our approach is illustrated on a test case using the IEEE 39 bus test system, underlying the impact of attribution mechanisms on trades and grid usage.

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