A framework for participation of prosumers in peer-to-peer energy trading and flexibility markets

As the owners of distributed energy resources (DER), prosumers can actively manage their power supply and consumption and partake in new energy services. In order to enable prosumers to benefit from their participation in energy services, innovative market models need to be designed. This paper proposes a framework for local energy and flexibility trading within distribution networks, in which prosumers participate in a peer-to-peer (P2P) market to trade energy with each other based on their preferences. The P2P market is cleared in a decentralized manner with direct interaction of seller and buyer prosumers. Then, the distribution system operator (DSO) checks the network constraints based on the energy scheduling of prosumers. If the network constraints are not satisfied, the DSO calculates the flexibility that is required in each feeder to avoid network issues. Triggered by the requested flexibility by the DSO, prosumers in each feeder form a community and participate in a flexibility market, in which they can offer their flexibility in response to the DSO's request. An iterative auction is employed to clear the flexibility market, which enables the prosumers to independently decide on their offered flexibility, while the DSO adjusts the flexibility price to minimize its costs. The proposed framework is tested on a real-world distribution network. Simulations based on a number of case studies indicate that through the proposed framework, the DSO can avoid network constraints violation by employing prosumers' flexibility. Besides, participation in the P2P and flexibility trading reduces the net energy costs of the prosumers in different community by an average of 17.09%.