A network-aware market mechanism for decentralized district heating systems

District heating systems become more distributed with the integration of prosumers, including excess heat producers and active consumers. This calls for suitable market mechanisms that optimally integrate these actors, while minimizing allocating operational costs. We argue inclusion network constraints to ensure feasibility incentivize loss reductions. propose a network-aware as Quadratic Program (QP), which determines optimal dispatch set nodal marginal prices. While dynamics are generally represented by non-convex constraints, we convexify this formulation fixing temperature variables neglecting pumping power. The resulting variable flow model leaves sign size injections flexible, is important prosumers. based on peer-to-peer trades add explicit terms. allows us trace losses back producer consumer losses. Through dual analysis reveal components prices, well relations between prices seller buyer A case study illustrates advantages comparison our proposed loss-agnostic benchmark. show mechanism effectively promotes local consumption thereby reduces total cost. conclude loss-aware can help reduce operating costs in district networks integrating