Transactive energy trading of residential prosumers using battery energy storage systems

In a transactive energy (TE) framework, prosumers can participate in peer-to-peer (P2P) energy trading with neighbors. TE also allows prosumers to participate in grid services by trading their excess energy or energy consumption flexibility with the grid operators, energy suppliers, and third-party energy companies (e.g., Aggregators). This paper presents a novel bidding strategy for small-scale residential prosumers for energy trading in the day-ahead TE market using the flexibilities of residential battery energy storage systems to maximize the profit from energy trading. The bidding model is formulated as a bi-level optimization problem that determines energy trading bids to maximize profits for the prosumer in the upper level, while the lower-level problem schedules the operation of residential storage units with respect to minimum storage degradation and optimum user comfort. A comprehensive storage model is developed that incorporates the operational constraints and the degradation of storage units when they undergo frequent charge-discharge cycles for the energy trading. The proposed bidding model is evaluated via a case study for a typical Australian prosumer and results indicate the efficacy of the proposed model in terms of profit maximization for the prosumer while satisfying user preferences and constraints related to the operation of the storage units.