Double-layer decentralized framework for local energy trading in the smart energy distribution network

The integration of Renewable Energy Sources (RESs) into the electricity grid is essential for obtaining sustainable energy transition, improving energy security, and decreasing carbon footprint. RESs play a crucial role in modernizing the electricity network and facilitating the global movement toward a low-carbon electricity network. Peer-to-peer (P2P) local energy trading appears as an innovative technology that can improve RES integration by enabling prosumers to trade residual energy within the regional energy market. This decentralized trading model not only optimizes the utilization of distributed energy resources but also promotes energy federalization, reduces energy loss, and facilitates renewables integration at the community level. Furthermore, P2P energy trading facilitates the transition to a resilient and adaptive energy environment, enables better management of intermittent renewable generation, and improves grid flexibility. In this regard, this paper proposes a two-stage double-layer decentralized P2P local electricity market for the smart microgrid. The first stage consists of the Nash bargaining game model for optimal unit commitment (BGMU). The goal of this stage is to determine the optimal energy schedules of different customers. The second stage is equipped with the double-layer P2P energy trading market. In the first layer, customers trade energy packages with each other. During this stage, some of the locally produced energies are not successfully matched. In this regard, a second market layer is introduced to handle these residual energy packages. The results show that BGMU can optimally schedule producers’ and consumers’ energy. The BGMU results are transmitted to customers, who will trade these energy packages. Using the proposed P2P energy market’s first layer, the total operating cost of the studied network is reduced by 57% compared to trading with the wholesale energy market. Also, adding the second layer to the P2P energy market leads to a further decrease in the operating cost by 9% compared to the first stage of the presented P2P energy market.