Pricing and Simulating Energy Transactions in Energy Communities

Extensive literature is available for modeling and simulating local electricity markets, often called P2P electricity markets, and for pricing local energy transactions in energy communities. Market models and pricing mechanisms provide simulation tools to better understand how these new markets beh...

Full description

Bibliographic Details
Main Authors: João Mello, Cristina de Lorenzo, Fco. Alberto Campos, José Villar
Format: Article
Language:English
Published: MDPI AG 2023-02-01
Series:Energies
Subjects:
Online Access:https://www.mdpi.com/1996-1073/16/4/1949
_version_ 1811153830059966464
author João Mello
Cristina de Lorenzo
Fco. Alberto Campos
José Villar
author_facet João Mello
Cristina de Lorenzo
Fco. Alberto Campos
José Villar
author_sort João Mello
collection DOAJ
description Extensive literature is available for modeling and simulating local electricity markets, often called P2P electricity markets, and for pricing local energy transactions in energy communities. Market models and pricing mechanisms provide simulation tools to better understand how these new markets behave, helping to design their main rules for real applications, and assessing the financial compensations of the internal energy transactions. As such, pricing mechanisms are often needed in energy management systems when centralized management approaches are preferred to market-based ones. First, this paper highlights the links between local electricity markets, pricing mechanisms for local electricity transactions, and other approaches to sharing the collective benefits of participating in transactive energy communities. Then, a standard nomenclature is defined to review some of the main pricing mechanisms for local energy transactions, an innovative pricing mechanism based on the economic principles of a post-delivery pool market is proposed, and other relevant approaches for local electricity market simulation such as Nash equilibrium or agent-based simulation are also revisited. The revision was based on systematic searches in common research databases and on the authors’ experience in European and national projects, including local industrial applications for the past five years. A qualitative assessment of the reviewed methods is also provided, and the research challenges are highlighted. This review is intended to serve as a practical guide to pricing mechanisms and market simulation procedures for practical designs of internal financial compensation to share the collective benefits of energy communities.
first_indexed 2024-03-11T08:53:18Z
format Article
id doaj.art-e03a934abf754796a93b927b77d49eba
institution Directory Open Access Journal
issn 1996-1073
language English
last_indexed 2024-03-11T08:53:18Z
publishDate 2023-02-01
publisher MDPI AG
record_format Article
series Energies
spelling doaj.art-e03a934abf754796a93b927b77d49eba2023-11-16T20:20:03ZengMDPI AGEnergies1996-10732023-02-01164194910.3390/en16041949Pricing and Simulating Energy Transactions in Energy CommunitiesJoão Mello0Cristina de Lorenzo1Fco. Alberto Campos2José Villar3INESC TEC—Institute for Systems and Computer Engineering, Technology and Science, 4200-465 Porto, PortugalInstitute for Research in Technology (IIT), ICAI, Universidad Pontificia Comillas, 28015 Madrid, SpainInstitute for Research in Technology (IIT), ICAI, Universidad Pontificia Comillas, 28015 Madrid, SpainINESC TEC—Institute for Systems and Computer Engineering, Technology and Science, 4200-465 Porto, PortugalExtensive literature is available for modeling and simulating local electricity markets, often called P2P electricity markets, and for pricing local energy transactions in energy communities. Market models and pricing mechanisms provide simulation tools to better understand how these new markets behave, helping to design their main rules for real applications, and assessing the financial compensations of the internal energy transactions. As such, pricing mechanisms are often needed in energy management systems when centralized management approaches are preferred to market-based ones. First, this paper highlights the links between local electricity markets, pricing mechanisms for local electricity transactions, and other approaches to sharing the collective benefits of participating in transactive energy communities. Then, a standard nomenclature is defined to review some of the main pricing mechanisms for local energy transactions, an innovative pricing mechanism based on the economic principles of a post-delivery pool market is proposed, and other relevant approaches for local electricity market simulation such as Nash equilibrium or agent-based simulation are also revisited. The revision was based on systematic searches in common research databases and on the authors’ experience in European and national projects, including local industrial applications for the past five years. A qualitative assessment of the reviewed methods is also provided, and the research challenges are highlighted. This review is intended to serve as a practical guide to pricing mechanisms and market simulation procedures for practical designs of internal financial compensation to share the collective benefits of energy communities.https://www.mdpi.com/1996-1073/16/4/1949energy communitiesself-consumptionlocal electricity marketsenergy managementtransactions pricingbenefits sharing
spellingShingle João Mello
Cristina de Lorenzo
Fco. Alberto Campos
José Villar
Pricing and Simulating Energy Transactions in Energy Communities
Energies
energy communities
self-consumption
local electricity markets
energy management
transactions pricing
benefits sharing
title Pricing and Simulating Energy Transactions in Energy Communities
title_full Pricing and Simulating Energy Transactions in Energy Communities
title_fullStr Pricing and Simulating Energy Transactions in Energy Communities
title_full_unstemmed Pricing and Simulating Energy Transactions in Energy Communities
title_short Pricing and Simulating Energy Transactions in Energy Communities
title_sort pricing and simulating energy transactions in energy communities
topic energy communities
self-consumption
local electricity markets
energy management
transactions pricing
benefits sharing
url https://www.mdpi.com/1996-1073/16/4/1949
work_keys_str_mv AT joaomello pricingandsimulatingenergytransactionsinenergycommunities
AT cristinadelorenzo pricingandsimulatingenergytransactionsinenergycommunities
AT fcoalbertocampos pricingandsimulatingenergytransactionsinenergycommunities
AT josevillar pricingandsimulatingenergytransactionsinenergycommunities