Blockchain-Based Local Energy Market Enabling P2P Trading: An Australian Collated Case Study on Energy Users, Retailers and Utilities

Self Cite

Peer-to-peer (P2P) trading in a local energy market (LEM) offers various participants the opportunity to negotiate and strike energy deals among themselves using a distributed ledger technology called blockchain. In this paper, a new local model is presented using a layer-2 scalability solution for secondgeneration (Gen2) blockchain technology to enable P2P trading among four types of participants: consumers, prosumers with solar photovoltaic (PV) systems, prosumers with solar PV systems and battery energy storage systems (BESSs), and electric vehicles (EVs). The proposed LEM trading platform involves several critical steps, including the creation of typical forecasting profiles for load consumption, solar generation, and battery state-of-charge (SOC) through a forecasting solution. Next, the LEM participants place their pricing bids using a trading agent service, and the trading engine collects the profiles data and bid prices, which performs matchmaking in a forward-facing market. The output of the trading engine consists of dispatch signals for prices and energy values that are sent to each participant to execute actual trading. Furthermore, the trading engines store the accepted and past bidding data and energy values of P2P trades for each participant in blockchain technology, which can be retrieved and displayed on the LEM user interface screens of participants and administrators using their blockchain addresses at any time during the trading process. This study focuses on simulating proposed LEM models, incorporating functional limitations and market rules. These rules aim to reduce energy costs, enhance margins for utilities and retailers, and mitigate grid congestion through BESSs, resulting in reduced operational and capital expenditure. LEM outcomes are analysed and compared with a Business-as-usual (BAU) model. Participants' energy trading behaviour, costrevenue dynamics, grid impact, and blockchain implementation costs are explored. The study highlights LEM benefits in terms of reduced CO2 emissions by 984 kg CO2, increased self-sufficiency by 2.2%, and improved financial benefits of all participants by 21.6%. The use of modern blockchain technology guarantees secure data storage and rapid, cost-effective energy trading, thereby making the proposed LEM platform a viable solution in the distribution market.INDEX TERMS Blockchain technology, forecasting service, LEM, P2P energy trading, smart contracts.

Section: Introductionmentioning

confidence: 99%

Integrating Forecasting Service and Gen2 Blockchain Into a Local Energy Trading Platform to Promote Sustainability Goals

Ali,

Azim,

Ojha

et al. 2024

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“…Despite network charge incorporation into P2P energy trading, such as in [19,25], where various NUC policies are explored, there remain gaps in the literature regarding comprehensive investigations into how these charges affect the financial landscape of DSOs. While certain studies have compared DSOs' revenues with and without P2P energy trading [17,26], the impact on each component of DSOs' costs and revenues is still in question. Such an investigation holds the potential to mitigate the financial risks faced by DSOs and allows DSOs to sustainably manage the distribution system.…”

Section: Introductionmentioning

confidence: 99%

Network Usage Charge Framework for Peer-to-Peer Energy Trading in Distribution Systems

Larbwisuthisaroj,

Chaitusaney

2024

This paper focuses on the integration of network charges in peer-to-peer (P2P) energy trading, which enables prosumers and consumers to engage in direct energy transactions. Considering the importance of network charges in P2P energy trading, a framework for network usage charges (NUCs) and corresponding market clearing mechanisms are proposed. The NUCs comprise two key components: distribution NUCs (DNUCs) and operational NUCs (ONUCs). These charges are designed to recover energy-related and nonenergy-related costs incurred in the distribution system. DNUCs are proposed with two alternative schemes based on the postage stamp and electrical distance methods, whereas ONUCs are modeled based on distribution locational marginal prices (DLMPs). To assess the impact of the proposed NUC framework on P2P market clearing results and the financial viability of the distribution system operators (DSOs), simulations are performed on a modified IEEE 18-bus distribution system. The results demonstrate the significant influence of the NUCs on the P2P market clearing outcomes, highlighting the potential financial risks for DSOs if NUCs are not appropriately integrated.

“…As for the energy suppliers, their roles and integration importance are acknowledged in [18]. The impact of involvement of energy suppliers on impacting the features of a well-functioning LEM is analysed in [19]. Moreover, the aggregated prosumers-facilitated energy supplier concept is reported in [20] to design a futuristic LEM.…”

Section: Introductionmentioning

confidence: 99%

Application of a Community Battery-Integrated Microgrid in a Blockchain-Based Local Energy Market Accommodating P2P Trading

Ali¹,

Azim²,

Peters³

et al. 2023

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This paper presents the application of a community battery energy storage system (CBESS)integrated microgrid (MG) in a blockchain-enabled local energy market (LEM). The proposed LEM balances the community energy requirement while facilitating frequent peer-to-peer (P2P) energy transactions between several energy users in the presence of both energy supplier and energy operator. The architecture is formulated by taking a number of local market and network constraints, that include residential battery energy storage system (RBESS) constraints; CBESS constraints; P2P traded price constraints; P2P traded power constraints; margin constraints of the stakeholders; power grid export and import constraints; and network energy balance constraints, so as to not only incentivise energy users but also reduce import/export from/to power grid while keeping the margins of energy supplier and energy operator unaffected. Different types of transactions data including energy users' P2P pricing bids and P2P traded energy volume are also stored in the blockchain database. Further, the developed LEM framework is also validated through a case study executed on an actual Australian power grid network, comprising 260 residential energy users; two energy suppliers; an energy operator; and a CBESS, and the performance of the proposed P2P trading-based LEM strategy is compared with the existing business-as-usual (BAU) that directs energy users to buy/sell energy at the time-of-use (ToU)/ feed-in-tariff (FiT) rate. The extensive and comparative simulation results confirm the superior performance of the proposed LEM mechanism in terms of minimising energy users' electricity bill; lowering power grid import and export; and retaining margins of energy suppliers and the energy operator; and thus, emphasise its application suitability in the current electricity market.INDEX TERMS Blockchain, community battery, energy supplier, local energy market, energy operator, peer-to-peer energy trading, power grid.