# Transaction Mechanism Based on Two-Dimensional Energy and Reliability Pricing for Energy Prosumers
## 5 Discussion  
The proposed ERT has both advantages and disadvantages compared to conventional price-based systems, as summarized in Table 4.  
From the viewpoint of the utility or retailer, by using additional information provided by prosumers, forecasting accuracy can be improved as shown in Table 3 compared to the conventional simple pricing case. Here, the risk caused by forecasting error can be shifted from the utility or retailer to prosumers. Furthermore, by providing an additional incentive to prosumers for enhanced energy usage and uncertainty forecasting, prosumer self-investment can be promoted, deferring direct investment by the utility or retailer. However, the system becomes more complex when an ERT is implemented, and additional settlement and billing solutions are required. The grid operation risks can increase when prosumers forecast intentionally wrongfully. The utility or retailer should provide more incentives to prosumers for the proposed mechanism even though they can evade direct investment for facilities.  
From the prosumer viewpoint, the proposed mechanism provides more room in selecting the means to maximize benefits. For example, when a prosumer possesses a resource with high uncertainty, the prosumer can select a low-reliability price band to minimize forecasting error. Alternatively, they  
\begin{table}
\begin{tabular}{c c c} \hline \hline  & **Utility/Retailer** & **Prosumer** \\ \hline \multirow{2}{*}{Advantages} & Enhanced forecasting with additional information Promotes self-investment, deferring direct investment & Flexible investment and operation choices Increased opportunity to maximize benefits \\ \hline \multirow{2}{*}{Disadvantages} & Increase in operational complexity Increased grid operation risks Increase in incentives Increased risk of penalty \\ \hline \hline \end{tabular}
\end{table}
Table 4: Advantages and disadvantages of the ERT.  
\begin{table}
\begin{tabular}{c c c c c c c c} \hline \hline  & **1\%** & **5\%** & **10\%** & **15\%** & **20\%** & **25\%** & **30\%** \\ \hline \multirow{4}{*}{Case 0} & \multirow{4}{*}{1.2} & \multirow{4}{*}{2.8} & \multicolumn{4}{c}{**Revenue enhancement**} \\  & & & & 3.3 & 3.6 & 3.7 & 3.7 & 3.7 \\ \cline{1-1} \cl  
can invest in energy storage to decrease uncertainty, and can then select a high-reliability price band to maximize profit as shown in Table 3. Conversely, the prosumer now has additional responsibility for forecasting and price selection, increasing system and operation complexity.  
The more price differences between bands in the ERT there are, the stronger the motivation to the participating prosumers. As a result, the net revenue or profit of the prosumers and the reliability of the utility can both be increased. However, the utility would provide more incentives to prosumers. Therefore, the utility should be careful in ERT price design not to provide unnecessary incentives obtaining excessive reliability. ERT bands can be designed as the combination of the maximum price, the range of absolute error for the maximum price zone, and the shape of the declining slope. It means that various price models can be designed with the ERT.