Double auction mechanisms for peer-to-peer energy trading: A comparative analysis

Abstract

Peer-to-Peer (P2P) energy trading, one of the new paradigms driven by decentralization, decarbonization, and digitalization of the smart grid, has become a widespread technique in recent years. Additionally, the rise of the double auction for P2P energy trading suggests better trading algorithms with unprecedented economic and technical benefits. This work evaluates various discrete double auction mechanisms, i.e., Average, VCG, Trade reduction, and McAfee's for multiple microgrids. By doing this, the trading algorithm provides players more flexibility to decide from the types of double auctions available. We further study properties such as individual rationality, balanced budget, truthfulness, and economic efficiency associated with energy trading. For practical applicability, we simulate the functionality of the trading algorithms using IEEE LV feeder data. In the end, this work demonstrates a variation in energy trading and social welfare due to the time of usage tariff and change in bidding range.