Peer-to-peer market clearing framework for DERs using knapsack approximation algorithm

Rapid uptake of distributed energy resources (DER) requires a new market platform for their active participation to manage energy balance locally. This paper proposes a new Peer to Peer (P2P) market in transactive energy (TE) framework for trading energy among distributed residential prosumers. P2P market is used to enable DERs to trade energy in a distribution network. DERs in the form of residential prosumers decide to buy and/or sell energy to/from other prosumers through an auction. A knapsack approximation algorithm is proposed and the mechanism of market clearing is presented to maximize the economic surplus for a given DER owner in the auction. Residential prosumers, if acting as a seller, use a Battery Energy Storage System (BESS) for storing renewable energy and evaluate the amount of energy that can be appropriately bid in a given time interval. Numerical results depict that using the proposed framework increases the economic surplus of DER owners in the market.