Towards Harmonious Decentralization of Energy Systems: A Vision of Interoperable Peer-to-Peer Energy Markets

We present a hierarchical framework aimed at decentralizing the distribution systems market operations using localized peer-to-peer energy markets. Hierarchically designed decision-making algorithm approaches the power systems market operations from a bottom-up perspective. The three layers of the hierarchical framework operate in orchestration to enable prosumers (the grass-root actors) to maximize their revenues - hence, a prosumer-centric framework. The design of the framework incorporates existing smart grid technologies (Virtual Power Plants, Microgrids, Distributed Energy Resources) and redefine their functional objectives to align them with the decentralization paradigm focused on empowering bottom-up grid operations approach. On one hand, the framework is enabling prosumers with simultaneous access to the buy-sell choices that help them maximize their cost savings while ensuring their consumption patterns and preferences are not being tradeoff as a result of top-down operational decisions. On the other hand, it is designed to operate in harmony with the existing top-down grid operations mechanisms - thereby reducing the potential friction in its adaptation. This marriage of the top-down and bottom-up operational approaches is facilitated through meticulous orchestration of operational timescales. Framework's novel design also incorporates scalability and interoperability considerations, thereby tackling the challenge of decentralization holistically.