Rethinking the Role of Prosumers - Electricity Market Design for Peer-to-Peer Trade in Smart Grids
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Increasing deployment of residential photovoltaic systems, investments in communal wind power projects, and nationwide rollout plans for smart meters -- the electricity sector in many countries is on the verge of a bottom-up restructuring, and its decades-old market designs are not prepared: The current system is still relying to a large extent on fossil fuels and is no longer economically viable and compatible with future sustainability targets. There has recently been a growing adoption of efficient small-scale solutions for distributed generation technologies that enable end-use customers to become active participants -- so-called prosumers -- in local supply-demand operations. The electricity markets -- as they are designed today -- do, however, not account for distributed generation capacities, nor are these efficiently integrated into the planning and operating procedures. The fundamental principles of existing electricity markets must be re-designed based on recent developments. Specifically, if decentralised generation capacities continue to increase, what would be a possible path for the electricity market to adjust to these changes? This master's thesis proposes a framework for the efficient integration of prosumers and their small-scale renewable generation into the current electricity system. The presented analysis is twofold: The first part elaborates local market designs centred on the role of peer-to-peer trade and battery storage flexibility for prosumer communities. The second part introduces a possible framework for the integration of these local markets into the existing electricity system. These two subsequent parts are presented in the format of two journal papers: In journal paper one, we introduce two distinct system setups for a representative prosumer community that distinguish by the placement level of local storage -- residential vs. communal placement. The small community consists of heterogeneous households with or without generation and storage technologies in the Greater London area. For the two distinct system setups, we propose market designs that incorporate rules on how prosumers can trade with each other and how the residential or communal storage is accessed. To this end, we compare the cost-efficiency of the two market designs with the help of a linear optimisation model that represents community interactions in the presence of storage. The combined features of peer-to-peer trade and storage flexibility result in savings of up to 28% for the community. In journal paper two, we push the analysis of local markets with peer-to-peer trade and battery storage one step further, and propose a possible market framework to efficiently integrate interactive prosumer communities with residential storage into the existing market operations. By a two-stage stochastic programming approach, we include the sequenced decision-making procedures of the day-ahead and intraday markets under the uncertainty of renewable supply and price realisations. A Smart ElecTricity Exchange Platform (STEP) represents the computational interface between the two market layers, and plans the community's activities. The modelling results of London houses illustrate that the combined flexibility of peer-to-peer trade and battery storage leads to an electricity bill reduction of 59% in the community.