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Distributed energy resources (DERs), such as small-scale renewable energy generators, storage systems, and controllable loads, have been attracting great attention. Accordingly, interest in peer-to-peer (P2P) energy trading between prosumers with DERs is growing. The prosumers may perform the P2P electricity trading within the loss-guided framework, where network losses are primarily considered during the peer matching process. However, the loss-guided framework has limitations in that prosumer welfare is neglected in favor of prioritizing the network losses caused by the P2P transactions. Thus, in this study, a price-based framework for P2P electricity trading is suggested, where the prosumer welfare is considered by including not only network loss costs but also energy costs in the matching procedure. The effects of the suggested price-based framework on network efficiency, prosumer welfare, and social welfare are examined by comparing simulation results with the loss-guided framework and the random transactions. Further, how those three properties are affected by the change in loss price is analyzed and a guideline for the suitable choice of the loss price is suggested.

In this study, we examined the impacts of peer-to-peer (P2P) electricity trading on the power losses in the network, which is one of the objectives optimized in the centralized approach. For this purpose, we reviewed the conventional loss management schemes and suggested the requirements to be considered in the design of P2P electricity trading. Then, we described a new loss management framework for P2P transactions and introduced the concept of the transaction guide. Based on the proposed framework, we simulated the P2P transactions with and without the transaction guide and examined the variation in the network losses. Three noteworthy remarks are derived from the simulation in this paper. First, the random characteristics of P2P trading itself do not guarantee favorable transaction ordering in terms of network losses, but when the new loss management framework is applied, the network losses can be effectively decreased. Second, through the new loss management framework, loss costs can be fairly allocated to individual prosumers. Third, to invigorate the P2P electricity trading, an incentive program should be considered to alleviate the burden of loss costs of the first trader in the P2P electricity trading.