A Peak-Shaving-Oriented Incentive Mechanism for Smart Grids

Prosumers play a crucial role in smart grids, especially within local energy communities (LECs), since they can both consume and produce energy. When peer-to-peer (P2P) energy trading is available, prosumers can exchange their produced energy with each other: if done properly, this may lead to better energy self-consumption throughout the grid, resulting in reduced transmission losses, lower energy costs, and decreased wear and tear to the grid. Previous work on this topic led to a mechanism capable of obtaining several such goals, like preventing intentional energy production curtailment, disincentivizing simultaneous energy consumption that may lead to congestions, encouraging users to consume their own produced energy as much as possible, and ensuring that even if users initially create schedules with a selfish approach, they will ultimately converge upon a configuration that garners mutual agreement. However, this mechanism has not yet been analyzed from the perspective of peak shaving. Therefore, this paper aims to cover this shortcoming. Our objective in this work is to create a new mechanism that, under certain conditions, guarantees the achievement of optimal peak shaving. We will use it as a baseline to compare the existing mechanisms and understand under which conditions it leads to peak shaving. We performed simulations on a dataset from a grid in Cardiff, UK, and the results show that the existing mechanisms achieve optimal peak shaving both if the users act selfishly, and if they are allowed to form coalitions among themselves.