Peer-to-peer energy trades based on multi-objective optimization

Abstract The inclusion of distributed generation from renewable resources in the main grid generates active end-user participation not only as consumers but also as producers of electrical energy. However, this inclusion also presents difficulties in establishing an adequate operation for network power sources, especially when the end-users in a retail market are able to concurrently assume the role of buyer and seller. High variability in electricity demand and the changing nature of renewable energy generation require that the distribution system operator (DSO) includes a negotiation algorithm that allows interconnected users to indirectly participate in energy trades to and from each other and to and from the main grid in order to ensure fair energy trade competition. The aforementioned algorithm increases the participation benefits in a liberalized market since producers have the advantage of selling their power source at the best price while consumers choose with whom to buy electric energy from at the lowest price. In this work, a negotiation algorithm for the interconnected distributed energy resources is proposed as a methodology in order to self-management the electrical exchange between producers and consumers. Finally, case studies are presented to validate the self-management methodology proposed in four different scenarios, and as a result, the simulations show that fair competition and the adequate operation of interconnected power resources for the electrical transactions between produced energy and consumed energy is possible.