Designing a decentralized multi‐community peer‐to‐peer electricity trading framework

Abstract Electric power systems are currently undergoing a transformation towards a decentralized paradigm by actively involving prosumers, through the utilization of distributed multi‐energy sources. This research introduces a fully decentralized multi‐community peer‐to‐peer electricity trading mechanism, which integrates iterative auction and pricing methods within local electricity markets. The mechanism classifies peers in all communities on an hourly basis depending on their electricity surplus or deficit, facilitating electricity exchange between sellers and buyers. Moreover, communities engage in energy exchange not only within and between themselves but also with the grid. The proposed mechanism adopts a fully decentralized approach known as the alternating direction method of multipliers. The key advantage of this approach is that it eliminates the need for a supervisory node or the disclosure of private information of the involved parties. Furthermore, this study incorporates the flexibility provided by residential heating systems and energy storage systems into the energy scheduling of some prosumers. Case studies illustrate that the proposed multi‐community peer‐to‐peer electricity trading mechanism effectively enhances local energy balance. Specifically, the proposed mechanism reduces average daily electricity costs for individual prosumers by 63% compared to scenarios where peer‐to‐peer electricity trading is not employed.