A Vickrey Auction‐Based Non‐Cooperative Game Framework for P2P Electricity Trading in a Community

ABSTRACT In recent years, peer‐to‐peer (P2P) energy trading in local electricity markets has attracted significant research attention as a cost‐effective alternative to traditional grid exchanges. This paper proposes a new two‐stage non‐cooperative game theory framework for electricity exchange between prosumers, consumers and a local energy storage (LES) agent in a community market. The first stage determines peer participation order based on priority lists and willingness coefficients shared with the community manager. The second stage implements the P2P market using Vickrey auction principles, ensuring truthful bidding aligned with actual energy valuations. This iterative process continues until maximal satisfaction of prosumers' surplus and consumers' demand is achieved, with residual exchanges facilitated through the LES agent when necessary. The framework's effectiveness is demonstrated through two case studies: a comparison with existing methods in the IEEE 14‐bus system and a larger test system with more agents. The results reveal three key benefits: higher profits for prosumers, lower electricity costs for consumers and a transparent market mechanism that naturally discourages false bidding by reducing its potential gains.