Consideration of Power System Restrictions in a Double Auction Peer-to-Peer Market

As the power system is undergoing fundamental changes in the scope of the energy transition, the existing regulatory structure lacks the necessary components to cope with these changes. More decentralized energy resources are being integrated into the system on lower voltage levels, while coordination of these, especially considering the limited grid capacities, is not realized. Furthermore, central power exchanges operate without considering these physical capacities within one bidding zone and limit small-scale participants. A restructured energy market is required to enable small-scale asset integration and the recognition of physical limitations. Therefore, this paper presents a decentralized, grid-aware peer-to-peer market model that allows for automatically executed, local schedule procurement of peers within a distribution system community. The model uses nodal trading agents and a sensitivity-based approximation to assess the dynamic grid fees of any transaction, hence mapping the physical limitations to the consumers' energy prices. Therefore, users can fully adjust their behavior based on the demand and availability of energy and the grid capacities, which the energy prices comprise. Based on these, each peer is enabled to adjust its behavior through load shifting, storage optimization, and various other adaptions. Overall the proposed market structure transforms the power system from a correcting to a coordinating nature.