Development of the business feasibility evaluation model for a profitable P2P electricity trading by estimating the optimal trading price

Jongbaek An, Taehoon Hong, Minhyun Lee

Research output: Journal article publicationJournal articleAcademic researchpeer-review

Abstract

For the market participants (i.e., energy consumers and prosumers) in a microgrid to acquire profits via trading surplus electricity, it is essential to determine an appropriate trading price of electricity. Therefore, this study developed a business feasibility evaluation model to predict the optimal trading price of electricity that maximizes the profits of both the market participants participating in the Peer-to-Peer (P2P) electricity trading, by reflecting the structure of electricity market in South Korea. The residential areas located in the seven metropolitan cities in South Korea (Seoul, Incheon, Daejeon, Daegu, Ulsan, Busan, and Gwangju) were selected for the model application. The main findings from the model application are as follows. First, the annual electricity generation of the solar photovoltaic (PV) panel was highest in Daegu (5,541 kWh) and lowest in Seoul (3,569 kWh). In addition, the electricity generation was generally shown to be higher in spring (March–May) and relatively lower in summer and winter. Second, the estimated annual maximum profit of the energy prosumer was highest in Daegu (US$995.5) and lowest in Seoul (US$638.1). Furthermore, it was determined to be beneficial to the energy prosumers to reduce their self-use rate to the extent possible. By using the developed business feasibility evaluation model, decision makers, including specialists and non-specialists, can determine the optimal trading price of electricity and whether to participate in the market of P2P electricity trading.

Original languageEnglish
Article number126138
JournalJournal of Cleaner Production
Volume295
DOIs
Publication statusPublished - 1 May 2021

Keywords

  • Business feasibility evaluation
  • Energy prosumer
  • Genetic algorithm
  • Levelized cost of electricity
  • Optimal trading price of electricity
  • Peer-to-Peer electricity trading

ASJC Scopus subject areas

  • Renewable Energy, Sustainability and the Environment
  • Environmental Science(all)
  • Strategy and Management
  • Industrial and Manufacturing Engineering

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