Towards Harmonious Decentralization of Energy Systems: A Vision of
Interoperable Peer-to-Peer Energy Markets
Abstract
We present a hierarchical framework aimed at decentralizing the
distribution systems market operations using localized peer-to-peer
energy markets. A 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 ac- tors) 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 redefines their
functional objectives to align them with the decentralization paradigm
focused on empowering the 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 traded
off 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. The frameworkâ\euro™s novel design also
incorporates scalability and interoperability considerations, thereby
tackling the challenge of decentralization holistically.