A Novel Bilateral Energy Trading Mechanism for Electricity Markets with Numerous Prosumers

With the rapid development of distributed energy resources, increasing number of residential and commercial users have been switched from pure electricity consumers to prosumers that can both consume and produce energy. To properly manage these emerging prosumers, a peer-to-peer electricity market has been explored and extensively studied. In such an electricity market, each prosumer trades energy directly with other prosumers, posing a serious challenge to the scalability of the market. Therefore, a bilateral energy trading mechanism with good scalability is proposed for electricity markets with numerous prosumers in this paper. First, the multi-bilateral economic dispatch problem that maximizes the social welfare is formulated, taking into account product differentiation and network constraints. Then, an energy trading mechanism is devised to improve the scalability from two aspects: (i) an accelerated distributed clearing algorithm with less exchanged information and faster convergence rate. (ii) a novel selection strategy to reduce the amount of computation and communication per prosumer. Finally, the convergence proof of the proposed accelerated algorithm is given, and the proposed selection strategy is illustrated through a Monte Carlo simulation experiment.