The various power market challenges of the conventional power system are projected to be addressed by a smart grid. It entails a synergy between the three pillars of electricity trading, 1) energy market economics, 2) power network balancing, and 3). market policies and regulations. This paper explores an overview of peer-to-peer (P2P) trading under a smart grid milieu from these three pillars’ perspectives. The first pillar delineates the energy userâ€™s role flipping between the consumer and prosumer due to behind-the-meter distributed energy resources integration to maximize their payoffs. At the power network, P2P trading necessitates a). robust and sophisticated network infrastructure, and b). bi-directional Internet and communication technologies for successful electricity trading in the distributed electricity market. This is defined as physical and virtual levels of P2P architecture under the second pillar of P2P. Lastly, the third pillar is essential for adequately constructing an optimal business strategy to maximize the playerâ€™s profit function.
Keywords Distributed electricity market, distributed energy resources, market economics, market regulation and policies, P2P, prosumer, power network, smart grid