Peer-to-Peer Energy Trading Negotiation Based on Cost Allocation

Peer-to-peer (P2P) methods have attracted a lot of attention in a market environment focused on consumer needs. An iterative peer matching procedure is proposed in this paper rather than simultaneous bilateral negotiation between all peers, which would have large overheads, to trade among peers for a bilateral negotiation. Earlier studies have not considered a large power system network for P2P trading with a transaction fee. As of now, many studies have not included the greediness factor for trading between prosumers. In this context, this work provides a bilateral negotiation between all agents as a key component of P2P markets for balancing supply and demand. Prosumers reach an agreement using the negotiation algorithm even if they are unfamiliar with the preference structures of their trading partners at the outset. The greediness factor is used for the prosumer’s selfish behavior, which allows each prosumer to change his bidding strategy. The grid operator can recover losses by applying a fee to each transaction to recover the costs associated with power losses. Their economic surplus rises as a result of the case study by utilizing the greediness factor. Additionally, the non-mediated method of negotiation is used, which decreases the computational complexity and scalability issues.