Sustainable local energy communities: The role of peer-to-peer trading, EVs, and RECs on social welfare and emissions

Abstract

Peer-to-Peer (P2P) energy trading is known as a decentralized method of energy management in local energy communities (LECs), which allows consumers and prosumers to directly exchange energy. This model improves resource distribution, balances local demand and supply, and integrates renewable energy sources (RES) and distributed generation (DG), inducing energy independence and sustainability. This study introduces a novel P2P energy trading model for LECs that addresses three main objectives: maximizing welfare, minimizing environmental emissions, and minimizing grid consumption due to high costs and emissions. The proposed model includes RES, electric vehicles (EVs), charging stations, DG, and flexible storage, combined with a multi-objective approach for optimal energy management. In our study, the LEC has been clustered into three zones (residential, commercial, and industrial) each with specific energy needs and resources. These LECs allow for customized energy plans while fostering collaboration across sectors. The model also integrates EV charging stations, hydrogen-based systems (fuel cells and electrolyzers), and distributed electric storage to ensure efficient energy use. Moreover, centralized and decentralized storage and DG systems, enabling seamless energy exchanges both within and across zones, are considered. This cross-zone interaction, facilitated by the P2P trading energy enhances flexibility, optimizes resource use, and promotes energy autonomy. Additionally, the model integrates real-time energy management, allowing prosumers to dynamically manage energy consumption, storage, and trading. The flexibility of P2P exchanges between batteries, DGs, and EVs further improves efficiency, adaptability, and sustainability, making the system more resilient and environmentally friendly. To prove the superiority of the proposed method, three scenarios are considered as an independent operation of LECs, LECs equipped with batteries, and LECs utilizing P2P energy trading with batteries. P2P trading significantly reduces grid consumption by 2.7 % from Scenario 1–2 and 13.77 % from Scenario 2–3. Emissions are also reduced by 2.73 % between Scenario 1 and 2, and a further 13.77 % between Scenario 2 and 3.