Comparative Clearing Approaches in the Local Energy Market Based on the Prosumer Case Study

Abstract

In general, the clearing method in the local energy market is introduced based on two well-known methods: auction-based and game theory. However, both methods focus on different aspects; the auction-based method is based on economic equilibrium, whereas game theory is based on the concept of maximum profit. Therefore, to clarify the difference, the processes and algorithms of both methods are discussed and compared in this paper. In this study, the prosumer case study based on the non-cooperative day-ahead market is used to compare both methods. The prosumer is a good case because, as the lowest unit in the local market, it can apply to either seller or buyer. According to the case study, the comparative results focus on the difference between the local price and retail price, and the allocated energy quantity. The findings from the comparative results will advise the market operator on the most appropriate clearing method and market player for the bidding strategy design.