Adoption of Local Peer-to-Peer Energy Markets: Technical and Economical Perspectives for Utilities

Peer-to-peer (P2P) energy markets constitute a promising approach for locally coordinating the increasing amount of distributed energy resources (DERs) in the distribution system. Although the benefits of P2P markets for the prosumers are already well understood, their impact on utilities is not well discussed nor well understood. This hinders the development of regulatory frameworks, which are still needed to allow for the widespread adoption of decentralized energy markets in any interested country. So far, research has been conducted in specific isolated aspects, making it difficult to understand the overall implications for utilities. The present study aims to tackle this research gap by comprehensively evaluating P2P markets' effects, considering utilities as primary stakeholders. A qualitative roadmap with the overall benefits and challenges of adopting P2P by utilities is outlined to reach this purpose. Technical and economic criteria are assigned for comparing a P2P market to the current regulatory framework. Each criterion is evaluated in a co-simulation platform connecting a market model to a power flow model. Market performance is assessed by revenue analysis, and grid operation indicators evaluate grid performance. Furthermore, network fees are introduced as compensation mechanisms for the net revenue loss. Comparison scenarios encompass network fees and the number of agents, PV, and storage penetration. Results demonstrate that there is no possible benefit for both utilities and prosumers simultaneously if looking exclusively at the financial balance of the market. An equilibrium in benefits for all stakeholders is achievable if non-financial metrics are considered in an integrated market and fee structure analysis. Moreover, results demonstrate that the design of market structures must be sensitive to network configurations and DER penetration changes. This study contributes toward comprehending how the utilities could embrace P2P markets as a feasible solution for grid coordination challenges, opening a new set of questions for further research.