Distribution Loss Allocation in Peer-to-Peer Energy Trading in a Network of Microgrids

The increasing integration of multi-owned distributed energy resources (DERs) in distribution systems calls for decentralized energy management systems and deregulated and liberalized electricity markets. Peer-to-peer (P2P) electricity markets are promising in the distribution systems for multiple bilateral trades between any two agents. Besides, the distribution cost allocation regarding power loss on the distribution lines among multiple agents needs to be resolved as well under P2P markets. In this paper, we describe two methods for distribution loss allocation among a network of microgrids under P2P market framework in the distribution system. One is a power tracing (PT) based method, depending on the physical power flow while the other is a contractual paths (CPs) based method, depending on the energy transactions. Further, four scenarios are considered in the case study to illustrate these two methods.