Credit-based Peer-to-Peer energy sharing mechanism under the distributed negotiation framework

Peer-to-peer (P2P) energy sharing has recently emerged as an appealing concept and is believed to be one of the essential techniques in the next-generation energy market. However, under the conventional energy sharing mechanism, the “covenant-lite” market enables pure consumers to enjoy the bonus brought by the sharing economy but make a very low contribution. Therefore, in the paper, we present a credit-based P2P energy sharing mechanism under the context of the Internet of Things (IoT). Compared with the current mechanism, the introduction of the credit aims at recording the contribution of each prosumer to encourage the end-users with complementary energy consumption and supply profiles to participate in the sharing scheme. The proposed credit-based sharing mechanism can avoid the pure prosumers merely receiving shared energy without making contributions. Therefore, a fair and profitable energy-sharing platform can be provided to motivate all prosumers. To protect the privacy of the prosumers, an IoT-based distributed negotiation framework between prosumers and the distribution system operator (DSO), based on the Alternating Direction Method of Multipliers (ADMM) algorithm, is presented. Therefore, the sharing decision can be made in a distributed manner while ensuring the physical constraints of the electricity grid. The proposed mechanism and framework are verified in case studies. Through the simulation results, it can be concluded that the proposed method not only enhances the fairness of the sharing but also reduces the cost of the prosumers. Furthermore, more sharing behaviors occur under the credit-based mechanism. © 2022 Elsevier Ltd. All rights reserved.