A Three-Stage Stochastic Peer-to-Peer Market Clearing Model with Real-Time Reserve Activation

Abstract: With an increasing share of volatile renewables, more flexibility is needed to balance the electricity system. In order to enable local flexibility, we suggest a three-stage stochastic market clearing model using community-based peer-to-peer (P2P) trading with participation in the short term reserve markets. With this approach, internal intraday (IID) and real-time (IRT) markets are cleared where peers can trade to balance their day-ahead market position under uncertainty in load and activation of reserves. Results show increased participation of 19 and 44 % in reserve markets when P2P IID and IRT is introduced. We illustrate the application of the model and give advice for the future reserve market design highlighting necessary changes in order to unlock end-user flexibility to the reserve market.