Microgrids and peer-to-peer (P2P) energy trading are important technical and market arrangements to deal with the challenges brought by the increasing penetration of distributed energy resources (DERs). In this paper, a P2P energy trading hierarchy was proposed for microgrids in distribution networks. Hierarchical P2P markets were established for facilitating the energy trading between prosumers and consumers. A two-stage matching method, including bilateral and pool-based matching, was proposed to match the generation and demand in the hierarchical P2P markets. An extended Mid-Market Rate (MMR) pricing method was further proposed for clearing the hierarchical P2P markets. The proposed hierarchy and matching and pricing methods were tested on a distribution network adapted from a practical network in Neath Port Talbot, Wales, UK. Simulation results demonstrate the operation of the proposed hierarchy, and indicate that the proposed hierarchy, with the proposed matching and pricing method, has the potential to bring greater social welfare compared to the conventional market paradigm.
Keywords peer-to-peer energy trading, microgrid, distribution network, prosumer, distributed energy resource, local electricity market