Building bridges: Unlocking cost savings through peer-to-peer trading between heat prosumers

• Peer-to-peer heat trading is explored under optimization-based control. • Economically and environmentally focused trading schemes are examined. • P2P trading reduces costs and emissions by up to 29.57 and 28.13%, respectively. • When export tariffs are removed, peers are more likely to secure cost savings. • Cost and emission savings are more significant under limited internal storage. District heating networks (DHNs) offer efficient and sustainable heating for urban buildings, but their centralized form limits operational flexibility and cost-effectiveness for individual buildings, especially positive energy ones. Peer-to-peer (P2P) energy trading has emerged as a potential solution to enhance local and private energy exchange. However, research on the economic and environmental impacts of P2P heat trading remains scarce, and commercial applications are absent so far, compared to P2P trading of electricity. This study explores the feasibility and benefits of P2P heat trading under various trading mechanisms, with a focus on cost and emission savings, using a newly developed nonlinear optimization framework. Results indicate that P2P trading can significantly reduce costs and emissions. Particularly when storage capacities are limited, P2P trading achieves cost and emission reductions of up to 29.57% and 18.38%, respectively, for an economically focused optimization, or 3.03% and 28.13% for an environmentally focused optimization. Moreover, when heat exports to the DHN are not incentivized, the economic benefits of P2P trading become more pronounced, with cost savings increasing to 5.19% compared to individual operations instead of 2.09% when the exports are incentivized. It is highlighted that P2P trading is beneficial under various studied schemes, most notably in terms of environmental impact. However, it becomes most effective when buildings have limited thermal storage or when DHN interaction is constrained, where all trading schemes show substantial enhancements but differ greatly in terms of the magnitude of enhancement.