Optimal peer-to-peer coupled electricity and carbon trading in distribution networks

A recent study published in Engineering presents a novel approach to address the challenges brought about by the increasing integration of distributed renewable energy resources in distribution networks. The research, led by Yue Xiang et al., focuses on optimizing peer-to-peer (P2P) coupled electricity and carbon trading among prosumers.

With the growth of prosumers—individuals who can both generate and consume electricity from distributed renewable sources—the need for efficient trading mechanisms has become crucial. However, the bidirectional power and carbon interaction introduced by prosumers complicates decision-making in distribution networks. To tackle this, the researchers developed a carbon-coupled network charge-guided bi-level interactive optimization method between the distribution system operator (DSO) and prosumers.

The proposed framework consists of two levels. At the upper level, the DSO calculates carbon-coupled network charges using a carbon-emission responsibility settlement method. This method takes into account the impact of P2P trading based on carbon-emission flow and optimal power flow models. The DSO then guides P2P trading through price signals, ensuring network security and low-carbon operation. At the lower level, a decentralized P2P trading mechanism is established for prosumers to trade energy and carbon-emission rights.

To solve the complex P2P coupled market trading model, the researchers employed an alternating direction method of multipliers (ADMM) with an adaptive penalty factor. This algorithm decomposes the problem into smaller sub-problems, allowing for parallel processing and faster convergence. An improved bisection method was also used to ensure the convergence of the bi-level interaction.

The effectiveness of the proposed model and methodology was demonstrated through a case study on the modified IEEE 33-bus system. The results showed that the model achieved optimal electricity–carbon P2P trading, outperforming traditional market schemes in terms of economic benefits and carbon-emission reduction. The carbon-emission responsibility settlement method accurately quantified carbon emissions, while the carbon-coupled network charges effectively guided prosumers to adjust their trading strategies. This led to energy trading that was proximity-based, network-friendly, and low-carbon oriented, maintaining line loadings and node voltages within safe limits.

The study also explored the impact of renewable energy source (RES) penetration on the bi-level interactive model. It found that as the RES penetration rate increased, the electricity trading price among prosumers rose, while the carbon-emission price decreased. The proposed P2P trading market can thus facilitate the energy transition in the distribution network, as prosumers are incentivized to produce or purchase renewable energy to avoid additional carbon-emission costs.

This research provides a significant contribution to the field of distribution network management, offering a practical solution for achieving safe and low-carbon operation in the context of increasing renewable energy integration.

The paper “Optimal Peer-to-Peer Coupled Electricity and Carbon Trading in Distribution Networks,” authored by Huangqi Ma, Yue Xiang, Alexis Pengfei Zhao, Shuangqi Li, Junyong Liu. Full text of the open access paper: https://doi.org/10.1016/j.eng.2025.01.006. For more information about the Engineering, follow us on X (https://twitter.com/EngineeringJrnl) & like us on Facebook (https://www.facebook.com/EngineeringJrnl).