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For grid-connected neighbors within communities, blockchain-enabled peer-to-peer energy trading proves to be a coherent approach to trade energy from locally produced and distributed renewable energy resources. Effective matching among peers enables enhanced energy efficiency during energy transactions, thereby improving the power quality and preferentially increasing user welfare. The proposed algorithm builds upon work to develop a system of scoring an energy transaction. It employs a McAfee-priced double auction mechanism and assigns the scores based on the preference of factors like price, locality, and the type of energy generation, in addition to the quantity of energy being traded. These transactions are pre-evaluated by the said algorithm to determine the optimal transactional pathway. As a result, the transaction that is finally executed is the one holding the highest cumulative score. The proposed algorithm is simulated over a range of scenarios and tends to boost the user welfare percentile by an average of 75%. From an economic perspective, the algorithm may be implemented in small to large settlements while remaining stable. By reducing power loss, this energy trading algorithm empowers consumers to save around 25% on their energy costs and offers prosumers a 50% increase in revenue.


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Blockchain-based Peer-to-Peer Energy Trading Method

Show Author's information Myles J. ThompsonHongjian SunJing Jiang ( )
Department of Engineering, Durham University, Durham, UK
Department of Mathematics, Physics and Electrical Engineering, Northumbria University, Newcastle upon Tyne, UK

Abstract

For grid-connected neighbors within communities, blockchain-enabled peer-to-peer energy trading proves to be a coherent approach to trade energy from locally produced and distributed renewable energy resources. Effective matching among peers enables enhanced energy efficiency during energy transactions, thereby improving the power quality and preferentially increasing user welfare. The proposed algorithm builds upon work to develop a system of scoring an energy transaction. It employs a McAfee-priced double auction mechanism and assigns the scores based on the preference of factors like price, locality, and the type of energy generation, in addition to the quantity of energy being traded. These transactions are pre-evaluated by the said algorithm to determine the optimal transactional pathway. As a result, the transaction that is finally executed is the one holding the highest cumulative score. The proposed algorithm is simulated over a range of scenarios and tends to boost the user welfare percentile by an average of 75%. From an economic perspective, the algorithm may be implemented in small to large settlements while remaining stable. By reducing power loss, this energy trading algorithm empowers consumers to save around 25% on their energy costs and offers prosumers a 50% increase in revenue.

Keywords: smart grid, blockchain, Peer-to-peer energy trading, matching algorithm, renewable energy source

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Publication history

Received: 01 January 2021
Revised: 17 June 2021
Accepted: 15 July 2021
Published: 10 September 2021
Issue date: September 2022

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© 2021 CSEE

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Acknowledgements

This work was supported by the European Union’s Horizon 2020 research and innovation programme under the Marie Sklodowska-Curie Grant Agreement No. 872172 TESTBED2 project.

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