A Pricing Mechanism for Peer-to-Peer Energy Trading in Distribution Systems to Enhance Market Balance through Simulation-Based Analysis

The transition to decentralized energy systems has emphasized the potential of peer-to-peer (P2P) energy trading markets to enhance efficiency, equity, and sustainability. However, these markets encounter significant challenges in maintaining a balance between energy supply and demand, often leading to inefficiencies and reliance on the distribution system operator (DSO) for adjustments. Existing pricing mechanisms, such as structured, uniform, and offer-based pricing, inadequately address these challenges due to limitations in adaptability and fairness. This paper proposes a dynamic pricing mechanism that leverages data to align participant behavior with market conditions, reducing DSO dependence and encouraging a balanced market. The methodology includes an optimization framework for energy allocation, a comparative evaluation of pricing mechanisms, and benefit analysis for participants. Simulation results demonstrate the effectiveness of the proposed method to enhance market efficiency and equity, achieving higher total benefits and fairer distribution compared to existing pricing mechanisms. This paper contributes to the theoretical understanding and practical implementation of P2P energy trading markets, offering insights into optimizing decentralized energy markets for balance and imbalance scenarios.