A Win-Win Local Energy Market for Participants, Retailers, and the Network Operator: A Peer-to-Peer Trading-driven Case Study

What are the outcomes of using a local energy market (LEM) to trade electricity between participants, retailers/suppliers and the network operator? Such a question is becoming increasingly important for electrical grids as more and more solar photovoltaics (PVs) and battery energy storage systems (BESS) are introduced. This paper presents the formulation and economic analysis of a peer-to-peer (P2P)-driven LEM to determine its suitability for each of the players in the market. To do so, a framework is proposed to define the objective function of the LEM while the financial and network parameters are considered. Then, the designed model is deployed on an actual Australian suburb containing 300 participants - 200 consumers, 50 prosumers with solar PVs, and 50 prosumers with solar PVs and BESSs. This research examines the case of two retailers/suppliers and the network operator to evaluate the financial gains which are compared to the business-as-usual (BAU), where consumers buy electricity from the grid while prosumers sell excess energy back to the grid, via feed-in-tariff (FiT) mechanism. The simulation results emphasise that with a LEM: 1) all participants save money, with prosumers owning solar PVs and BESSs gaining the most; 2) the income margin of the retailer with only consumers remains unaffected, but it is slightly increased for other retailer with prosumers; and 3) the network operator sees a slight increase in its income and grid congestion will reduce.