A DSO-Oriented Peer-to-Peer Energy and Reserve Market Framework With Condition-Driven Matching and Break-Even Analysis
Abstract
The increasing penetration of renewable energy (RE) introduces greater uncertainty into power generation and increases the need for system flexibility. To address the challenge, this paper proposes a framework that integrates peer-to-peer (P2P) energy trading with a reserve market to improve system flexibility. In the proposed model, a condition-driven double auction mechanism is used in the day-ahead stage to match reserve buyers and sellers with the objective of maximizing social welfare. In the real-time stage, penalties are applied to contract violations, and participant benefits are evaluated through a break-even analysis. The results show that, in the 6-participant case, some participants achieve 0%–0.0521% higher financial benefits, while in the 20-participant case, a larger proportion of participants achieve 0%–0.1987% higher financial benefits compared with procuring all reserve capacity through the DSO-only scheme. These outcomes depend on the reserve power shortfall and the break-even point. Compared with the conventional double auction, the proposed matching mechanism enables all matched pairs to successfully activate reserve contracts when reserve power is called. Overall, the proposed framework demonstrates the potential of combining P2P energy trading with a reserve market to support distribution-level flexibility procurement under RE uncertainty.