An Overview of Local Electricity Market Designs

The increasing amount of energy production from distributed energy resources leads to a re-examination of the existing electricity market designs. Local electricity markets could enable more flexibility in managing the energy uncertainty of the increasing number of prosumers. In this paper, an overview of local electricity market designs is given. The role of local electricity markets within the structure of wholesale and retail electricity markets is elaborated. The most recent literature review on local electricity markets is given. This paper also discusses the mathematical frameworks that are commonly used in the design of local electricity markets. The special objective is to analyze the potential application of game theory-based approaches. The commonly used optimization and equilibrium models are studied and compared. In order to reveal the roles and benefits of different local electricity market participants, the selected local electricity market designs are computationally implemented and mutually compared. The case studies are performed on the example of the conventional model of benchmark test power network. Based on the numerically obtained results the specifics of each market design are elaborated.