# State-Of-The-Art and Prospects for Peer-To-Peer Transaction-Based Energy System
## 6 Grid Constraints and Network Visibility
### Grid Constraints  
There is an increasing variety of motivations driving the power industry. In the U.K. for example, this drive for competition was accelerated in 1988 when the British government announced plans to privatize the electricity supply in England and Wales [103]. Thereafter, the Nordic electricity market (comprised of Sweden, Finland and Denmark) and U.S followed. This suggests that regulators in different jurisdictions forecasted that new values could be created by liberalizing electricity generation and supply. In these and other markets, the optimal price (the marginal cost of generation, when there is no risk of rationing) largely depends on the bidding behaviour in the wholesale market [103].  
In bilateral trades, apart from the freedom of the prosumers to set price, it also allows them to make decisions to fulfil non-economic goals such as the use of energy as social capital in which the transactions are characterized by trust, goodwill and cooperation instead of pure economic motives. As the sector continues to reform, different market designs are evolving to accommodate TE services, especially among players at the grid edge elements. A key design consideration is the ability of the transactive agents or actors to respond to economic incentive or feedback signals in such a way that aligns with the operational situation of the local distribution network and the grid generally [104]. In particular, as distribution system constraints are reached or exceeded, prices associated with culprit transactions increase (exponentially in some cases) [104]. Alternatively, the system or market operator may issue reference prices based on the hard limits of the distribution constraints. Similar methods have previously been deployed in some wholesale markets whereby the operators deployed locational marginal prices (LMPs) instead of dispatch instructions. In such cases, the asset owners were allowed to determine their generation output or usage in response to the LMPs [104]. This approach usurps the power of the local market operators, which may not be adequate to address the local system constraints. The mechanisms for accommodating distribution-level transactions in the face of system realities may be based on operational and technical constraints of the distribution grid, priorities established by the distribution system operator (DSO) based on operating guidelines, implicit economic values expressed in bids and offers from transactive parties or a combination of these. These same mechanisms could be used to offer new options for customers to lower energy costs, increase the use of renewable energy and better monitor and control electricity usage [105]. These are possible within the TE framework.  
In addition, the platform operator in conjunction with the DSO also needs to deal with prioritization as a way of managing congestion. For example, following the proliferation of plug-in-electric vehicles (PEVs) abbreviation, a distribution circuit may be unable to serve all PEVs in the neighbourhood at the same time. To resolve this, the TE platform operator may request the PEV owners to submit bids and offers among themselves to utilize the limited capacity provided by PEVs with a higher state-of-charge (SoC). Another approach is for the DSO to apply capacity reservation based on different conditions at a fee [104].