Prosumer Segmentation Strategies for Local Electricity Market Partaking by Monetary Reward

In order to pave the way for a modernized electricity grid with distributed energy sources and storage, a direct energy transaction among peers in the local electricity market (LEM) is emerging. The design of the local energy market has frequently concentrated on its structures and technological problems, but little on how to increase the willingness of customers to participate by using a customer-centric approach. In this article, we provide consumer engagement strategies in LEM with a focus on maximizing financial return while exchanging energy with peers. The empirical investigation is subjected to two stages of optimization, the first of which has a goal of minimizing system costs and the second of which has a goal of maximizing consumer rewards. We present four methods for rewarding customers financially for taking part in LEM. Segmentation of customers is proposed to achieve the profit maximization goal. The system cost is calculated for two cases and cost saving is used to distribute among the market participants. The proposed LEM model results in 12.87% cost savings which is used to incentivize the active participants of the market. Thus policy makers can be recommended to integrate such market mechanisms to ensure a flexible and efficient market mechanism.