Domestic P2P energy market design considering network reconfiguration and usage fees: Bi-level nonlinear programming and exact clearing algorithm

The wide utilization of network reconfiguration brings new challenges to domestic peer-to-peer (P2P) energy market. Specifically, flexible and changeable system topology has a profound impact on electricity distance-based network charges which increases the difficulty in market participants' decision-making. To address this issue, the authors propose a hierarchical P2P energy market framework which integrates network reconfiguration and virtual P2P power flow-based network usage fee (NUF) mechanism. Then, this framework is modelled as a bi-level nonlinear programming which reflects the complex interation between system topology, network charges and stakeholders' strategies. In the upper-level, distribution system operator (DSO) aims to maximize its economic benefits and ensure network security through network reconfiguration. In the lower-level, prosumers form a cooperative coalition to obtain their own optimal strategies (i.e., join in P2P trading or transact with DSO) under network charge mechanism. Furthermore, a model formulation method and a sample-based algorithm are presented to clear the domestic P2P energy market and ensure the convergence. Numerical results demonstrate that the proposed market achieves a win-win situation for both prosumers and DSO. Meanwhile, the proposed reformulation method and solution algorithm not only guarantee the global optimality under finite iterations, but also possess high computational efficiency. •A virtual P2P power flow-based network usage fees calculation method is designed for the hierarchical P2P market.•A bilevel nonlinear mathematical model is proposed to integrate the influence of changeable topology and network usage fees.•An exact algorithm with finite convergence is presented to solve the proposed nonconvex model.