A decentralized peer-to-peer control scheme for heating and cooling trading in distributed energy systems

With the increasing penetration of distributed energy resources, integrating renewable generations into energy systems is a significant trend for smart and cleaner energy systems. To this end, advanced energy management has become of great importance. Conventional control of distributed energy resources relies on a central operator, which is responsible for the energy flow from producers to consumers and regulates money transactions. As this operator or the bulk grid is a monopoly, not every user can freely connect to a distributed energy resource, and distributed energy resource s can neither compete on price and services nor decide the price of the energy they want to sell to the users. To facilitate the utilization of locally-produced energy, and balance the supply and demand, a novel decentralized competitive energy system is proposed. Through this highly automated and fully decentralized multi-energy management approach, different parties on the peer-to-peer network can conduct money transaction at the machine level without interference of the central operator. An integrated multi-layer system architecture of the competitive energy system is elaborated, including system operation mechanism, device bidding strategy, and a hardware device Energy Router. The underlying protocol for money transactions among devices is IOTA, a peer-to-peer network supporting the data and value transfer for machine economy. The proposed energy network can facilitate autonomous negotiation and execution of transactions among machines without central operator's intervention, and prevent monopolies, as well as promote easy admission of new distributed energy resources. Furthermore, a case study of a decentralized competitive heating system is presented to demonstrate the proposed architecture, and computer simulations were conducted to verify its rationality and potential value. The simulation results indicate that the peer-to-peer heating system outperforms conventional central heating systems in terms of both user cost and system efficiency, as it encourages end users to consume locally-produced energy. The proposed decentralized solution can save 61% operation cost in heating seasons.