Network Usage Charge Framework for Peer-to-Peer Energy Trading in Distribution Systems

Abstract

This paper focuses on the integration of network charges in peer-to-peer (P2P) energy trading, which enables prosumers and consumers to engage in direct energy transactions. Considering the importance of network charges in P2P energy trading, a framework for network usage charges (NUCs) and corresponding market clearing mechanisms are proposed. The NUCs comprise two key components: distribution NUCs (DNUCs) and operational NUCs (ONUCs). These charges are designed to recover energy-related and nonenergy-related costs incurred in the distribution system. DNUCs are proposed with two alternative schemes based on the postage stamp and electrical distance methods, whereas ONUCs are modeled based on distribution locational marginal prices (DLMPs). To assess the impact of the proposed NUC framework on P2P market clearing results and the financial viability of the distribution system operators (DSOs), simulations are performed on a modified IEEE 18-bus distribution system. The results demonstrate the significant influence of the NUCs on the P2P market clearing outcomes, highlighting the potential financial risks for DSOs if NUCs are not appropriately integrated.