IEEE Power & Energy Magazine - May/June 2018 - 38

Demand Uncertainty (kWh)

1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0

0

10

20
30
Time (h)

PV Output Profiles

40

50

Average PV Profile

figure 3. The daily outputs of a PV generator over a year;
the red curve represents the average diurnal value.

large number of fragmented energy buyers and sellers (prosumers) to find and trade with each other at a fraction of grid
energy costs. electricity prices would be set for an area or
a transaction so that local demand can be matched to local
generation and thus achieve a "local equilibrium." This local
equilibrium can absorb the uncertainty of the impact of lowcarbon supply and demand and thus reduce operational burdens on the dno and the wider market. intermittent renewable generating sources would be tracked in real time so that
those with the lowest reliability would offer the lowest price,
thus providing the greatest incentives for the demand side
to respond.
an application of a sharing economy to network access
would allow a licensed third party having greater skills in
risk assessment and risk mitigation to develop leasing strategies that dynamically match network availability with customer flexibility. Big data analytics is the key enabler to the
development of such sharing systems. We next discuss the
key technical gaps and prospective big data solutions for
each of these arrangements.

Local P2P Energy Markets That Can
Track Local Supply and Demand
in a local p2p market, prosumers are envisioned as being
able to collaborate horizontally and so trade to bypass the
central system. Such local market activities would provide
signals and incentives for local customers to change their
demand patterns and track the output of local generation,
thus absorbing the uncertainty locally.
The current half-hourly energy trading system is designed for conventional large-scale generation that can be centrally dispatched. distributed renewable generators have
very different characteristics. identifying the product a distributed generator can sell over time and space is critical to
pricing and matching intermittent generation with demand
38

ieee power & energy magazine

flexibility. For a typical solar energy producer, the energy
products it can offer into a central electricity market vary
substantially over time. The daily outputs of a sample pV
generator and its average diurnal value are shown in Figure 3, but the typical energy products it could offer to a
central market vary greatly from day to day, as depicted in
Figure 4. The product is a sampled and quantized profile of
similar pV outputs: the "score" indicates the tradable quantity of the product, and "Var" represents the residue quantity,
which is not tradable due to uncertainties.
This suggests a very different market design and operation for distributed low-carbon generation and demand flexibility. The market design must define what, how, and where
to buy and sell local renewable-sourced energy products,
considering vastly different energy products and their uncertainties. For local markets to compete, market operation must be
more efficient than the central half-hourly market.

Market Design-Reliability: The Third
Dimension of Market Equilibrium
The key challenge to developing local p2p markets is matching large numbers of supply and demand customers, each
with different priorities in terms of quantity, price, and,
critically, reliability of power supply. Trials of small- or
medium-scale p2p energy trading have already been investigated in other jurisdictions, e.g., Vandebron in The netherlands, piclo in the united Kingdom, and the Sonnenbatterie
community in germany. Key innovations that have been
considered are
✔ reflecting surplus and shortage of energy and mobilizing flexible demand to increase or decrease energy
requirements according to availability of energy
✔ enabling optimal energy distribution among customers from the local interruptible supply and central
traditional supply as well as maximizing the use of
local resources
✔ improving power flows in the distribution networks to
alleviate congestion levels and reduce the energy curtailment of renewables.
however, none of these approaches distinguishes between
high and low reliability of the energy supply.
To make full use of the sharing system, the third dimension of the market-energy reliability-must be introduced
to allow low and intermittent supplies to be traded and thus
unlock the financial value of the local resources. a new p2p
energy market theory is proposed that can extend the traditional theory so that it may account not only for price and
quantity but also for reliability. This would allow a wide range
of energy products to be delivered to customers with differing capabilities to achieve an economic balance between cost,
volume, and reliability in energy trading.
in Figure 5, we show that the traditional market has
almost 0% demand flexibility, while the energy product to
be traded is almost 100% available at all times. The demand
curve for this scenario is close to vertical. however, if demand
may/june 2018



Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - May/June 2018

Contents
IEEE Power & Energy Magazine - May/June 2018 - Cover1
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