Advancing Network‐Constrained P2P Transactions for Mutual Benefits: Lifecycle Costs Allocation DLMP Integrated With Soft Open Point Planning

ABSTRACT Peer‐to‐peer (P2P) transactions among multiple microgrids (MMGs) may cause network violations, requiring greater flexibility in the distribution network (DN). Soft open point (SOP) is a promising power electronic device to provide flexible active and reactive power regulation to the networks. In this context, this paper proposes a bi‐level network‐constrained P2P transaction framework integrating SOP capacity planning, offering a paradigm for lifecycle cost allocation in P2P markets. In the upper level, the DN ensures safe operation, optimises SOP capacity, and broadcasts market signals. To allocate network service costs and direct grid‐friendly transactions, a decomposable SOP planning integrated distribution locational marginal price (DLMP) is proposed as the pricing mechanism. In the lower level, MMGs optimise internal scheduling. To establish the global negotiation mechanism, a fully parallel distributed method based on diagonal quadratic approximation (DQA) is proposed. Case studies on the modified IEEE 33‐bus system show that the proposed transaction‐aware SOP planning method uncovers the potential of SOP planning in supporting P2P flexibility and improving social benefits. Total costs of the DN and MMGs are decreased by 2.11% and 8.44%, respectively.