A Nash-Stackelberg Game-Based Peer-to-Peer Joint Energy and Carbon Market Among Local Prosumers

Peer-to-peer (P2P) energy trading among emerging prosumers with considerable renewables is a promising pathway to facilitate the low-carbon operation of the distribution network. Influenced by sharing economy principles, carbon allowances, which are the commodity of prosumers, can be traded under the P2P framework integrating with the energy market. This paper proposes to establish a P2P joint energy and carbon market among local prosumers. A Nash-Stackelberg game model is constructed to analyze the interaction characteristics among energy sellers and buyers. The competition in pricing among the sellers can be modeled as a generalized Nash equilibrium problem and the price-demand interaction between energy sellers and energy buyers can be described as a Stackelberg game. The proposed solution method replaces the lower-level model with its optimality condition. The best response algorithm is employed to solve the market equilibrium. Case studies show the effectiveness of the proposed market model in increasing social welfare and reducing carbon emissions.