Prosumer Integration in Wholesale Electricity Markets: Synergies of Peer-to-peer Trade and Residential Storage

Jan Martin Zepter, Alexandra Lüth*, Pedro Crespo del Granado, Ruud Egging

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

In the energy strategy of the European Union, the end-user is envisioned as a key participant in the future electricity market (European Commission, [16]). Current market designs and business models lack incentives and opportunities for regular electricity consumers (e.g. residential buildings) to become prosumers and actively participate in the market. Incentives should include economic and behavioural motivation beyond subsidised flat feed-in tariffs. Opportunities should allow for active participation of prosumers with relatively modest generation volumes but significant flexibility. In this paper, we propose a framework to integrate prosumer communities into the existing day-ahead and intraday markets. Using a two-stage stochastic programming approach, we incorporate the sequenced decision-making in the wholesale system under uncertainty of renewable generation and spot prices. We focus on the value of peer-to-peer (P2P) trading in the integration of prosumers in the day-ahead and intraday markets and investigate how residential battery storage contributes to local demand side flexibility in an integrated market setting. To this end, we introduce the Smart elecTricity Exchange Platform (STEP) that represents the interface between the wholesale electricity markets and the prosumer communities, and coordinates the community's operational supply-demand decisions. A study on residential buildings in London show that both P2P trade and battery storage by themselves each induce a reduction of electricity bills by 20%–30%. Combined, P2P trade and battery storage may lead to savings of almost 60%. In other words, we find that peer-to-peer trade and flexibility options such as local storage generate higher levels of the community's self-sufficiency.

Original languageEnglish
JournalEnergy and Buildings
Volume184
Pages (from-to)163-176
Number of pages14
ISSN0378-7788
DOIs
Publication statusPublished - 1 Feb 2019
Externally publishedYes

Keywords

  • Peer-to-Peer market design
  • Prosumer communities
  • Residential battery storage
  • Smart buildings
  • Wholesale electricity markets

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