Decentralized peer-to-peer model of energy trading in smart grid considering price differentiation

An increase in electricity demand has sparked a new trend to restructure energy markets as consumer-centric marketplaces. One of the possible techniques for establishing decentralized energy market models is peer-to-peer (P2P) energy trading. In P2P energy trading, market players are encouraged to trade energy among themselves through direct negotiations. This paper presents a decentralized P2P model of energy trading considering price differentiation in the smart grid. Price differentiation offers different pricing for different market players based on their demands and preferences. Here, market participants exchange energy at decided price to optimize their welfare without exceeding constraints. Simulation studies are used to analyze the effectiveness of the proposed approach. To validate the efficiency of the proposed method, P2P energy trading with price differentiation results are compared with the results of P2P energy trading without price differentiation. It is clearly observed that the social welfare of the market players with price differentiation is increased by 49.64% (c) 2023 The Author(s). Published by Elsevier Ltd. This is an open access article under the CCBY-NC-ND license