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Peer-to-Peer Energy Trading with Sustainable User Participation: A Game Theoretic Approach

Wayes Tushar, Tapan Kumar Saha, Chau Yuen, Paul Liddell, Richard Bean, H. Vincent Poor

arXiv:1809.11034v1cs.GT

TL;DR

The paper asks how prosumers can sustain participation in P2P energy trading despite cooperation and pricing challenges. It designs a CCG-based trading scheme with core-based mid-market pricing, finding stable coalition formation and reported cost savings versus FiT.

  • Problem

    The paper addresses how to establish sustainable prosumer participation in P2P energy trading through social cooperation.

  • Method

    It designs a CCG-based P2P scheme, uses the core and mid-market pricing for revenue distribution, and evaluates consumer-centric participation with motivational-psychology models.

  • Results

    The proposed game has a non-empty core, mid-market revenues lie within it, and monthly P2P costs are lower than FiT costs for the evaluated prosumers.

  • Takeaways & Limitations

    The scheme is presented as consumer-centric and capable of supporting sustainable prosumer participation in P2P energy trading.

Abstract

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This paper explores the feasibility of social cooperation between prosumers within an energy network in establishing their sustainable participation in peer-to-peer (P2P) energy trading. In particular, a canonical coalition game (CCG) is utilized to propose a P2P energy trading scheme, in which a set of participating prosumers form a coalition group to trade their energy, if there is any, with one another. By exploring the concept of the core of the designed CCG framework, the mid-market rate is utilized as a pricing mechanism of the proposed P2P trading to confirm the stability of the coalition as well as to guarantee the benefit to the prosumers for forming the social coalition. The paper further introduces the motivational psychology models that are relevant to the proposed P2P scheme and it is shown that the outcomes of proposed P2P energy trading scheme satisfy the discussed models. Consequently, it is proven that the proposed scheme is consumer-centric that has the potential to corroborate sustainable prosumers participation in P2P energy trading. Finally, some numerical examples are provided to demonstrate the beneficial properties of the proposed scheme.

I. INTRODUCTION

The introduction motivates consumer-centric P2P energy trading by highlighting limited prosumer benefits from conventional schemes and the challenge of sustaining cooperation in low-control systems.

  • Motivation: Rooftop solar and residential storage are expanding, creating distributed renewable resources that can support more efficient energy-demand management.The cited passage reports rooftop PV market growth and projected storage-capacity expansion.
  • Motivation: Feed-in tariffs provide prosumers with market access, but their benefits are often limited, contributing to discontinuation of some schemes.The passage gives Australia as an example of a discontinued FiT scheme.
  • Research problem: P2P trading is proposed as an alternative that can improve prosumer economics and support renewable-energy penetration and grid stability.The passage contrasts P2P trading with FiT and describes its potential grid-level benefits.
  • Research problem: Reducing central-controller influence makes P2P trading trustless, creating a challenge in encouraging prosumers to cooperate.The paper frames cooperation as difficult when direct retailer control is low.
  • Research problem: Observed social interaction can raise P2P prices, potentially limiting rational buyers’ involvement; the paper therefore studies sustainable participation through prosumer cooperation.The stated investigation focuses on designing P2P trading that addresses this participation challenge.
  • Contribution: The paper proposes a CCG-based social-cooperation scheme and evaluates it against consumer-centric participation goals.Its contributions include coalition formation, core-based revenue distribution, and motivational-psychology models.

B. Microgrids domain

The paper situates its approach within P2P energy-trading research and models a two-layer prosumer network whose economic information layer supports consumer-centric participation.

  • Related work: P2P energy-trading research spans electric vehicles, microgrids, and distribution networks, with microgrid studies covering several exchange paradigms.Microgrid paradigms include inter-microgrid, intra-microgrid, and peer-to-microgrid trading.
  • Research gap: Existing studies often emphasize technical or economic objectives more than users’ adoption perspective, motivating a consumer-centric focus.The paper identifies sustainable use and user participation as underemphasized concerns.
  • System model: The system assumes a centralized power station and prosumers with rooftop solar panels but no storage devices.A footnote identifies a grid-tie solar system without storage as an example.
  • System model: The physical layer carries electricity through the distribution network, while the virtual layer carries information about pricing, incentives, interactions, and prosumer utility.The paper’s proposed work focuses exclusively on the virtual layer.
  • Prosumer operation: Each prosumer uses self-generated solar energy first, then acts as a seller or buyer according to surplus or deficit and may trade with the grid or other entities.Smart meters measure generation, consumption, and exchanges; trading costs and revenues use buying and selling prices.
  • Participation objective: P2P trading must remain beneficial to sustain participation, because otherwise prosumers may withdraw or go off-grid, harming prosumers and the network.The paper connects consumer-centric benefits with continued participation in the proposed setting.

IV. COALITION GAME FOR P2P TRADING SCHEME

The paper uses a canonical coalition game to show how prosumers can cooperate in P2P trading when participation offers sufficient economic benefit.

  • Game rationale: Coalition games provide analytical tools for studying rational players’ cooperative behavior.The paper applies this framework to energy use across the network.
  • Game rationale: The model aggregates surplus energy from sellers and deficiency from buyers across the energy network.The proposed framework considers total network-wide surplus and deficiency.
  • Participation rationale: Prosumer cooperation depends on attainable trading benefits and on avoiding unattractive monetary returns or excessive computational requirements.These conditions are presented as practical motivations for adopting P2P trading.
  • Contribution: The proposed CCG demonstrates the benefits of forming a prosumer coalition and supports the scheme’s consumer-centric objective.The paper introduces the coalition structure before analyzing its properties and user-participation implications.

A. Game Formulation

The game represents prosumers and coalition worth explicitly, prioritizes internal energy exchange, and assesses cooperation through benefit and stability conditions.

  • Game formulation: The CCG consists of seller and buyer players N = Ns ∪Nb and a value function ν measuring coalition worth.The value function is monetary: it represents what the coalition may earn or spend during P2P trading.
  • Game formulation: The coalition first trades surplus energy internally, then sells excess to or buys deficiency from the grid when necessary.This priority follows the value-function formulation.
  • Cooperation: A grand coalition is effective only if prosumers benefit from it rather than from noncooperation or disjoint coalitions.The paper notes that CCGs do not automatically guarantee a stable grand coalition.
  • Cooperation: Superadditivity captures the requirement that cooperation should not disadvantage participating prosumers or make leaving the grand coalition beneficial.This is stated as the game’s benefit-of-cooperation property.
  • Stability: The core is the set of feasible revenue allocations under which no individual or subgroup gains by abandoning the grand coalition.A non-empty core therefore establishes a stable coalition.
  • Stability: The Bondareva-Shapley theorem is used to determine whether the CCG has a non-empty core through a balancedness inequality.The theorem is stated using collections of subsets and weights over the power set.

V. PROPERTIES OF THE CCG INSPIRED P2P TRADING SCHEME

The section evaluates whether the proposed coalition is beneficial and stable for prosumers. It establishes superadditivity of the value function and a non-empty core under an appropriate trading-price range.

  • The section tests whether prosumer cooperation is stable and whether the proposed P2P scheme is consumer-centric.
  • The value function ν of the proposed game Γ is superadditive.The proof uses concavity and Jensen’s inequality to show that ν decreases as the number of disjoint coalitions increases.
  • Forming a grand coalition is always beneficial for all participating prosumers in Γ.Coalition stability then depends on distributing revenues so that every participant remains motivated to stay.
  • The proposed CCG Γ has a non-empty core when ps,g ≤ ptr ≤ pb,g under the grid’s current pricing scheme.This condition ensures that coalition allocations can satisfy stability requirements.

1) Distribution of revenue:

The proposed scheme distributes revenue using mid-market pricing across three generation-demand cases. The resulting trading prices keep the CCG core non-empty, confirming stability of the grand coalition under the stated assumptions.

  • 1) Distribution of revenue:: Mid-market rate pricing sets the P2P trading price to the midpoint of the grid’s buying and selling prices across three generation-demand cases.The cases are generation equal to demand, greater than demand, and lower than demand.
  • 1) Distribution of revenue:: In Case 1, generation equals demand, so sellers’ and buyers’ trading prices are equal and follow the midpoint expression.
  • 1) Distribution of revenue:: In Case 2, excess generation is sold to the grid after meeting prosumers’ demand, while the sellers’ trading price depends on network demand and grid prices.The numerator in the seller-price expression represents total seller revenue from surplus energy.
  • 1) Distribution of revenue:: In Case 3, buyers meet remaining demand from the grid, while the seller price is fixed at the midpoint of the grid’s selling and buying prices.
  • 1) Distribution of revenue:: The pricing values are fixed for each time slot once prosumers choose P2P trading, and regulatory charges are excluded from the pricing scheme.The platform may instead incorporate a fee in the trading price and pay the ISO a subscription fee.
  • 1) Distribution of revenue:: Theorem 3 establishes a non-empty core for the mid-market schemes in Cases 1, 2, and 3, confirming a stable grand coalition.The proof verifies that the relevant buying and selling prices remain within ps,g ≤ {ps,tr, pb,tr} ≤ pb,g.
  • 1) Distribution of revenue:: The stability result assumes that only the grid and the designed P2P trading platform operate in the system.If competitors offer different P2P services, the game must be designed differently; this is identified as future work.

B. Consumer-Centric Property

The proposed P2P scheme is designed to motivate prosumer participation through monetary incentives and repeated positive outcomes. Its coalition-game revenues satisfy the rational-economic and positive-reinforcement models, supporting its consumer-centric characterization.

  • B. Consumer-Centric Property: The paper evaluates consumer-centricity by testing whether the proposed scheme satisfies rational-economic and positive-reinforcement motivational models.The rational-economic model emphasizes monetary cost, while positive reinforcement links repeated positive outcomes to repeated participation.
  • B. Consumer-Centric Property: The coalition value is defined by monetary revenue, making economic incentives central to participation in P2P trading.
  • B. Consumer-Centric Property: The proposed game has a non-empty core, so a revenue distribution exists that gives prosumers no incentive to leave the grand coalition.
  • B. Consumer-Centric Property: Mid-market-rate revenues lie within the game core, satisfying the rational-economic model for participating prosumers.
  • B. Consumer-Centric Property: The proposed P2P technique satisfies positive reinforcement because participation is associated with similar positive outcomes across repeated trading situations.
  • B. Consumer-Centric Property: The paper therefore characterizes the proposed P2P energy trading scheme as consumer-centric.

VI. CASE STUDY

Numerical case studies assess whether social cooperation forms stable coalitions, reduces participating prosumers’ energy costs, and satisfies the consumer-centric property.

  • VI. CASE STUDY: The numerical case studies evaluate coalition stability, participants’ energy-cost reductions, and the consumer-centric property.

1) Formation of stable coalition:

The case study shows that solar availability determines when P2P trading occurs, while mid-market pricing remains within the grid-price range needed for coalition stability.

  • 1) Formation of stable coalition:: P2P trading occurs from 8:00 am to 3:00 pm, corresponding to the period when prosumers’ solar panels produce energy.
  • 1) Formation of stable coalition:: The CCG has a non-empty core when P2P buying and selling prices remain within the range between the grid’s selling and FiT prices.
  • 1) Formation of stable coalition:: Mid-market-rate trading prices stay within the specified grid-price range during the observed P2P trading period.
  • 1) Formation of stable coalition:: When solar energy is unavailable, prosumers rely on the CPS and do not cooperate through P2P trading.
  • 1) Formation of stable coalition:: The pricing condition leads participating households to form a stable grand coalition for mutually beneficial energy trading.

2) Cost saving to each prosumer:

The P2P scheme reduces monthly costs relative to FiT for all five prosumers, although savings vary by user and depend strongly on sunshine availability.

  • 2) Cost saving to each prosumer:: $8.05, $6.71, $14.56, $8.54, and $7.98 are the reported monthly savings for prosumers 1 through 5 under P2P versus FiT.The corresponding percentage savings are 3.76%, 3.45%, 1.76%, 1.24%, and 4.36%, respectively.
  • 2) Cost saving to each prosumer:: P2P savings vary across users: prosumer 3 saves $14.56 at 1.76%, whereas prosumer 5 saves $8.50 at 4.36%.
  • 2) Cost saving to each prosumer:: Monthly percentage savings are limited by days with little or no solar production, while sunny days produce substantially larger savings.
  • 2) Cost saving to each prosumer:: On December 2, 2013, daily percentage savings range from 9% to 53% across prosumers.
  • 2) Cost saving to each prosumer:: The proposed social-cooperation scheme never increases prosumers’ costs relative to FiT, with zero savings in the no-sun worst case.

3) Attainment of consumer-centric property:

The proposed P2P scheme is consumer-centric because social cooperation provides economic benefits without worsening prosumers’ costs relative to FiT. These benefits vary with sunshine duration and are supported by motivational and rational-economic properties.

  • Consumer-centric property: The scheme satisfies the consumer-centric property by combining economic benefit with positive reinforcement.Its rational-economic property was established through economic benefits for each prosumer, while positive reinforcement is used to complete the consumer-centric assessment.
  • Daily cost savings: Social cooperation benefits prosumers on every day with some sunshine, with greater savings on sunnier days.The comparison measures daily cost savings for five prosumers against the FiT scheme.
  • Daily cost savings: Even without sunshine, P2P social cooperation is never detrimental because its cost savings relative to FiT are zero rather than negative.The scheme’s benefit depends on daily sunshine time, but the worst case matches FiT instead of increasing prosumers’ costs.

VII. CONCLUSION

The paper proposes a coalition-game-based P2P energy trading scheme and evaluates its stability, pricing, motivational properties, and user benefits. It concludes that the scheme can support sustainable prosumer participation, while identifying network constraints, storage, and competing platforms as future extensions.

  • VII. CONCLUSION: The CCG-based P2P scheme has a non-empty core, confirming stability of the grand coalition among participating prosumers.The non-empty core is the paper’s coalition-stability result.
  • VII. CONCLUSION: The proposed mid-market-rate pricing gives each prosumer revenue within the game’s core.This links the pricing mechanism to the coalition’s stability conditions.
  • VII. CONCLUSION: The scheme satisfies two motivational psychology models, supporting its potential for user acceptance and sustainable participation.The paper uses these models to assess whether prosumers will continue participating in the proposed P2P trading arrangement.
  • VII. CONCLUSION: Future work would add network constraints, integrated storage, and multiple P2P platform providers with different pricing schemes.These extensions would examine impacts on participation and coalition stability.
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