An iterative uniform-price auction mechanism for peer-to-peer energy trading in a community microgrid

Abstract With the rapid deployment of distributed photovoltaic (PV) systems in residential buildings, peer-to-peer (P2P) energy trading in a community microgrid is highly desired since it enables flexible and economical energy transactions among neighboring prosumers. An efficient trading mechanism is pivotal for the successful and sustainable implementation of P2P energy trading in a community microgrid. This paper proposes a novel iterative uniform-price auction (IUPA) mechanism. Depending on the comparison between the aggregated energy supply and demand, the P2P market is divided into the seller’s market and the buyer’s market. The proposed auction mechanism is respectively implemented in the two types of markets in order to determine a uniform trading price and an efficient energy allocation. To maximize economic benefits, competitive prosumers iteratively adjust their bids based on their own private information and the issued market information until reaching a state of Nash equilibrium. This differs from the continuous double auction (CDA) in terms of bidding formats and prosumers’ trading strategies. Besides, the auction market self-adaption algorithm (AMSA) is designed for efficiently finding the equilibrium of the IUPA. Numerical studies demonstrate the effectiveness of the proposed mechanism in terms of finding fairer trading prices, saving total costs of the community, and promoting local transactions of excess PV energy.