Grid-Impact Aware P2P Trading and Implications on Flexibility Markets

This paper investigates the impact of peer-to-peer (P2P) markets on the safe operation of local distribution grids, and proposes control instruments, which can be applied by distribution system operators (DSO) to ensure grid safety while enabling P2P trading. The grid impact is captured through quantified modifications to the network states, and thus the DSO’s flexibility needs, that can result from P2P trades. In this regard, a P2P market formulation modeled as a generalized Nash equilibrium problem is adopted, in addition to a local flexibility market (LFM) formulation, through which the DSO can procure flexibility for congestion management. Two DSO control instruments are then proposed: (i) a preventive blocking method, through which the DSO can block (exante) the possibility of trades if they are deemed to harm the grid, and (ii) an incentive scheme, through which the DSO provides incentives to encourage the realization of P2P trades that are deemed helpful to the grid. A structured comparison of these methods, as compared to free P2P trading (i.e., without DSO intervention) is then conducted. The results showcase the varying impacts that P2P trades can have on the grid, being at instances helpful (resolving congestions) and at others harmful (exacerbating congestions). The results showcase that the proposed preventive blocking method, outperforms the alternatives for ensuring grid-safety while abiding by regulatory and practical requirements.