Blockchain-Enabled Demand Response Scheme with Individualized Incentive Pricing Mode

Abstract

Demand response (DR) can offer a wide range of advantages for electrical systems by facilitating the interaction and balance between supply and demand. However, DR always requires a central agent, giving rise to issues of security and trust. Besides this, differences in user response cost characteristics are not taken into consideration during incentive pricing, which would affect the equal participation of users in DR and increase the costs borne by the electricity retail company. In this paper, a blockchain-enabled DR scheme with an individualized incentive pricing mode is proposed. First, a blockchain-enabled DR framework is proposed to promote the secure implementation of DR. Next, a dual-incentive mechanism is designed to successfully implement the blockchain to DR, which consists of a profit-based and a contribution-based model. An individualized incentive pricing mode is adopted in the profit-based model to decrease the imbalance in response frequency of users and reduce the costs borne by the electricity retail company. Then, the Stackelberg game model is constructed and Differential Evolution (DE) is used to produce equilibrium optimal individualized incentive prices. Finally, case studies are conducted. The results demonstrate that the proposed scheme can reduce the cost borne by the electricity retail company and decrease the imbalance among users in response frequency.

Integrating Blockchain in Smart Grids for Enhanced Demand Response: Challenges, Strategies, and Future Directions

“…In their research, Guo et al proposed a blockchain-enabled DR scheme with a unique dual-incentive system, combining profit-based and contribution-based strategies [75]. This scheme, utilizing consortium blockchain technology, aims to secure the DR process and enhance energy management efficiency.…”

“…Blockchain's ability to create transparent and efficient energy marketplaces is a notable innovation. By providing a platform where energy production, consumption, and pricing are transparently recorded, blockchain can foster fairer and more competitive energy markets [75].…”

Blockchain Technology Applied in IoV Demand Response Management: A Systematic Literature Review

“…Demand response has been recognized as an important tool for managing supply and demand in electrical grids [64]. When there is an electrical deficit, DR becomes an effective alternative for absorbing the energy gap and managing power utilization [47]. Significant initiatives in blockchain-based demand response programs and optimization models are presented below.…”

“…To handle demand response in a V2G context, a P2P energy trading mechanism between EVs and network operators was proposed by S. Aggarwal [39], in an attempt to overcome smart grid imbalances and to control the ever-growing energy demands from EVs. Moreover, Z. Guo [47] presented a blockchain-enabled DR scheme with an incentive pricing model. First, the authors proposed a blockchain-enabled DR framework to promote the secure implementation of DR, while then they also designed a dual-incentive mechanism, based on the Stackelberg game model, to successfully implement blockchain demand response management.…”

Automated Scheduling Approach under Smart Contract for Remote Wind Farms with Power-to-Gas Systems in Multiple Energy Markets

“…The Brooklyn microgrid project practices the application of blockchain for microgrid energy markets [21]. A blockchain-secured demand response scheme is proposed to promote individualized incentive pricing under a dual-incentive mechanism in [22]. Focusing on the resource-consuming drawbacks of blockchain itself, beneficial solutions to reduce frequent transactions on blockchain is proposed in [23].…”