Peer-to-peer energy trading with advanced pricing and decision-making mechanisms

Electric power systems are undergoing significant changes around the world, involving electricity market deregulation and bidirectional power sharing, driven by the rapid development of distributed energy resources and digitalization technologies. Peer-to-peer (P2P) energy trading is a viable solution to integrating local energy prosumers, consumers, and flexibility options into interactive energy systems. This chapter presents the prosumer-based P2P energy trading market from the perspective of market architectures, system participants, as well as design mechanisms, including pricing, bidding, and operation methods. Different types of local energy trading systems are reviewed to discuss their advantages, limitations, potential applications, and challenges. Relative to centralized trading platforms with larger information bases and flexibility pools, decentralized platforms help to provide more scalable and autonomous markets, while the implementation of advanced blockchain technologies, game theory, and artificial intelligence in a multiagent environment can help improve the automation level and market efficiency. It is also important to discuss the stability, fairness, and privacy concerns in addition to achieving the optimal outcome at individual and system levels in the energy trading markets. © 2024 Elsevier Inc. All rights reserved.