  The new technologies emerging in the energy sector pose new requirements for
both the regulation and operation of the electricity grid. Revised tariff
structures and the introduction of local markets are two approaches that could
tackle the issues resulting from the increasing number of active end-users.
However, a smooth transition from the traditional schemes is critical, thus
creating the need for architecture that can be implemented in the current
circumstances. This paper proposes a local market concept and a corresponding
dynamic tariff system, which can be operated parallel to the current retail
market. The participants of the market can trade energy peer-to-peer via a
platform that allocates proper network charges to all transactions. The
calculated tariffs consider the physical effect of the transactions on the grid
in terms of nodal voltage deviations, branch current flows, and overall system
losses. The proposed method is tested on the IEEE European LV test feeder
through market simulations. The results imply that with the proper tuning of
DNUT (Dynamic Network Usage Tariff) components, the end-users can realize
surplus, while the security of network operation is also ensured.
