Optimal Operation of Distribution System Operator and the Impact of Peer-to-Peer Transactions
Hanyang Lin, Ye Guo, Firdous Ul Nazir, Jianguo Zhou, Chi Yung Chung, Nikos Hatziargyriou
TL;DR
The paper tackles how peer-to-peer trading among prosumers impacts distribution system operator (DSO) operation in networks with distributed energy resources. It develops a stochastic, scenario-based dispatch model that integrates energy and upward reserve markets with P2P contracts (energy and power types) and proves that energy-contract P2P trading does not alter the DSO's optimal dispatch or physical flows, while real-time imbalances can affect total network surplus; power-contract P2P trading is shown to be a special case with no impact. Through 2-bus and UKGDS 95-bus case studies with 1000 Monte Carlo scenarios, the work validates the theoretical results and highlights that P2P trading primarily shifts financial distribution between the DSO and prosumers without changing system-wide power flows. The findings provide practical guidance for DSOs: when P2P trades are structured as in the study, P2P activity can be largely ignored in dispatch decisions, simplifying operational planning while recognizing potential financial implications for prosumers engaged in P2P trading.
Abstract
Peer-to-peer (P2P) energy trading, commonly recognized as a decentralized approach, has emerged as a popular way to better utilize distributed energy resources (DERs). In order to better manage this user-side decentralized approach from a system operator's point of view, this paper proposes an optimal operation approach for distribution system operators (DSO), comprising internal prosumers who engage in P2P transactions. The DSO is assumed to be a financial neutral entity, holding the responsibility of aggregating the surplus energy and deficit demand of prosumers after their P2P transactions while dispatching DERs and considering network integrity. Impacts of P2P transactions on DSO's optimal operation have been studied. Results indicate that energy matching P2P trading where only the total amount of energy over a given period of time is defined may affect quantities of energy exchanged between the DSO and the wholesale market, but not internal dispatch decisions of the DSO. Different levels of real-time power consistency may lead to different total surpluses in the distribution network. For the real-time power matching P2P trading, as a special case of energy matching P2P trading, the provided energy and total surplus are not affected. In other words, DSO can safely ignore P2P transactions if they follow the format defined in this paper. Case studies verify these conclusions and further demonstrate that P2P trading will not affect physical power flow of the whole system, but the financial distribution between the DSO and prosumers.