Key Performance Indicator Based Design Guidelines for Local Electricity Markets

Local electricity markets (LEMs) are investigated as a solution to provide the residential and small commercial consumers, and prosumers the opportunity to have control over their electricity-related choices and make more profit from the electricity trading. This work analysis the market design factors such as update intervals in a time step, production to consumption (PtC) ratio and pricing scenarios, influencing the performance of an LEM run on the Decentralized Autonomous Area Agent (D3A) simulation framework. Comparing the results using performance indicators such as self sufficiency, share of market savings (SMS), and average buying rate (ABR) reveals that the performance of LEMs is highly dependent on the market design factors. The level of savings or profits made by participants also changes significantly with these market design factors. Furthermore, the results imply that LEM can provide better incentives for prosumers by providing them with the opportunity to trade their PV generated electricity at a price higher than the feed-in tariff. With only 20% reduction in average buying rate, it is also evident that LEMs provide a great opportunity for keeping the small scale PV systems active after their 20 years of fixed remuneration under Renewable Energy Source Act (EEG) in Germany.