An innovative localized retail electricity market based on energy broker and search theory

This paper aims to propose an innovative local energy market to accommodate localized energy trading and exchange for communities, buildings and campuses, which may own the surplus local energy produced by distributed energy resources (DER). These energy entities can participate in or form a localized trading platform, either buying or selling energy with searching local partners, without necessarily referring to a utility every time. An important new role, named the energy broker (EB), and working as a middleman or trader in this localized retail electricity market is introduced to get buyers and sellers together, serving as a solution to search friction. The trader itself also needs to maximize the transaction efficiency or revenue with consideration for search cost. In this way, the proposed market structure can be modeled based on search theory and an optimal stopping problem (OSP).