IEEE Signal Processing - July 2018 - 98

is limited, which could be because of the relatively recent
emergence and exploration of P2P trading frameworks in
energy domains.

Game theory for energy
management in a P2P network
P2P energy networks
In a P2P network, the members, or peers of the network, share
part of their own resources and information to facilitate certain
applications. Each peer is both a provider and a receiver of
resources and can directly communicate with other peers in the
network without the intervention of any intermediate node
[42]. This enables the network to be resilient in the face of failure of one or more peers and continue operating normally.
Thus, new peers can be added and old ones can be replaced
without altering the operational structure of the system. P2P
energy networks, as shown in Figure 1(b), consist of a number
of energy users, including both consumers and prosumers.
Prosumers are equipped with small-scale DER units, such as
rooftop solar panels or small wind turbines. The production of
energy takes place within each house (or near each house) to
reduce transmission losses and utilize cogeneration, if possible.
If a prosumer has surplus energy, he or she can either store this
energy in his or her storage device or distribute it among other
peers within the network to avoid waste [42]. This empowers
the users of the energy network to take control of the production and consumption of energy within the community without
any central control authority (e.g., the grid [35]) and to potentially avoid using complex algorithms and technological equipment to negotiate pricing for the buying and selling of energy
as well as its storage [42].
A P2P energy network consists of two main components:
a virtual energy-trading platform and a physical energy network [9]. The virtual energy-trading platform provides the
technical infrastructure for the local electricity market, and
it must be based on a secured-information system, e.g., the
blockchain-based architecture of the BMP, through which the
transfer of all kinds of information takes place. To avoid discrimination, it needs to be implemented so that each peer has
equal access; for example, the generation, demand, and consumption data of a peer are transferred from its smart meter to
the virtual layer through a secured communication network.
Then, buy and sell orders are created in the virtual layer based
on information obtained from the smart meter, which are then
sent to the appropriate market mechanism to facilitate energy
trading. Once the matching of buy and sell orders is completed between different peers, the payment is carried out, and,
subsequently, the exchange of energy takes place through the
physical layer.
On the other hand, the physical energy network is the distribution grid, which is used for the physical transfer of
energy among peers. This physical network could be the traditional distributed-grid network provided and maintained by
the independent system operator or an additional, separate
physical microgrid-distribution grid in conjunction with the
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traditional grid, which provides the network peers with the
flexibility to be physically disconnected from the main grid in
case of an emergency [9]. Note that the financial transactions
that are carried out between different peers in the virtual platform have no influence on the physical delivery of electricity;
rather, the payment can be thought of as the payment from
the consumers to their producing prosumers within the P2P
network for feeding the renewable generation into the distribution grid [9].

Key features of energy networks
An energy network should have seven key features that enable
successful P2P energy trading [9], [43].
■ The market participants: A clear definition of market participants as well as the purpose of the P2P energy trading
must be established, and the form of energy that is traded
in the market should be specified. P2P energy trading
necessitates the existence of a sufficient number of market
participants within the network, and a subgroup of the participants needs to have the capacity to produce energy. The
purpose of P2P energy trading, i.e., increasing the use of
renewable energy or reducing dependency on the main
grid, affects the design of pricing schemes and the market
mechanisms of the trading market. Furthermore, the form
of energy traded in the market should be defined, i.e.,
whether the energy is traded in the form of electricity, heat,
or a combination of both.
■ The grid connection: For balancing the energy generation
and consumption within the P2P energy-trading network, it
is imperative that the connection points of the main grid be
well-defined. At these connection points, it is possible to
connect a smart meter to evaluate the performance of the
P2P energy network, e.g., how much energy savings the
participants can realize by not buying from the grid. If a
physical microgrid-distribution network exists between the
participants, it swiftly decouples itself from the main grid in
case of an emergency. For island-mode operation, participants should have enough generation capacity to ensure the
appropriate level of supply security and resiliency. However, if the P2P energy trading is only conducted over the
existing traditional distribution network, such an islandmode operation is not possible.
■ The information system: A high-performing information
system is the heart of any P2P energy-trading network.
This is necessary for 1) connecting all of the market participants for the purpose of energy trading, 2) providing the
participants with a suitable market platform, 3) providing
the participants with access to the market, and 4) monitoring the market operation. It is essential that every market
participant has equal access to the market information
without any interference. Examples of such information
systems are blockchain-based smart contracts [22].
■ The market operation: The market operation of P2P energy
trading is facilitated by the information system, which consists of the market's allocation, payment rules, and a clearly
defined bidding format. Its main purpose is to provide an

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July 2018

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