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A novel dynamic pricing model for a microgrid of prosumers with photovoltaic systems

Boiarkin, V., Rajarajan, M. ORCID: 0000-0001-5814-9922, Al-Zaili, J. ORCID: 0000-0003-4072-2107 & Asif, W. (2023). A novel dynamic pricing model for a microgrid of prosumers with photovoltaic systems. Applied Energy, 342, article number 121148. doi: 10.1016/j.apenergy.2023.121148


Due to the growing demand for electricity and the increasing number of consumers who can produce energy (prosumers) using photovoltaic systems today, energy generated by prosumers can be utilized in the microgrid instead of selling it to the main utility grid. Pricing is one of the most important mechanisms for motivating prosumers to interact with each other in the microgrid. Many works have proposed different pricing models that mostly focus on optimizing prosumers’ behavior and energy usage costs. However, most of the proposed models require constant involvement of the end-user to adjust energy consumption profiles, which is not always possible in a real-world scenario. In this paper, a novel pricing model is presented with the aim of maximizing the utilization of energy generated in the microgrid and reducing the import of energy from the utility grid, whereas ensuring more beneficial prices for energy within the microgrid compared with the utility grid. Mathematical models based on the supply and demand ratio and prosumers’ absolute deviation from the predicted energy usage profiles are developed to determine the internal equilibrium price and the amount of energy each prosumer can buy and sell by interacting with the microgrid. To cover the energy transfer losses in the microgrid, a dynamic loss allocation mechanism is proposed. The proposed pricing model is validated using real energy usage profiles from 100 prosumers. The results show that the total energy usage cost can be decreased, whereas the amount of unused energy that is shared outside the microgrid is minimized.

Publication Type: Article
Additional Information: © 2023 The Author(s). Published by Elsevier Ltd. This is an open access article under the CC BY license (
Publisher Keywords: Microgrid, Energy trading, Electricity market, Prosumer, Dynamic pricing, Photovoltaic system
Subjects: T Technology > TK Electrical engineering. Electronics Nuclear engineering
Departments: School of Science & Technology > Engineering
SWORD Depositor:
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