Abstract

Peer‐to‐peer (P2P) energy trading enhances distribution network resilience by reducing energy demand from central power plants and enabling distributed energy resources to support critical loads after extreme events. However, adequate reserves from main grids are still required to ensure real‐time energy balance in distribution networks due to the uncertainty in renewable generation. This paper introduces a novel two‐stage joint energy and reserve market for prosumers, wherein local flexible resources are fully utilized to manage renewable generation uncertainty. In contrast to cooperative optimization methods, the interactions between prosumers are modelled as a generalized Nash game (GNG), considering that prosumers are self‐interested and should follow distribution network constraints. Then, linear decision rules are employed to ensure a feasible market equilibrium and develop a privacy‐preserving algorithm to guide prosumers toward the market equilibrium with a proven convergence. Finally, the numerical study on a modified IEEE 33‐power system demonstrates that the designed market effectively manages renewable generation uncertainty, and that the algorithm converges to the market equilibrium.