Renewable Energy Certificate Trading via Permissioned Blockchain

Abstract

With the continuous advancement of the green certificate trading mechanism, information verification needs to span multiple departments, which causes the application process cumbersome and human errors. In order to solve problems of cumbersome issuance process of the renewable energy certificate (REC) and the inflexible pricing mechanism, in this paper, a hybrid REC trading system was proposed based on an permissioned blockchain technology (BT), which combined advantages of the BT and the continuous double auction (CDA). The operation process of the system was introduced in detail, and the view change protocol in the Practical Byzantine Fault Tolerance algorithm was revised according to the characteristics of the system to improve the system stability. The continuous double auction rule was also introduced in the system. And corresponding bidding strategies were designed to maximize the revenue of users (buyer and seller) and transaction probability. The simulation experiment proves that the bidding mechanism can flexibly adjust the REC price according to the supply and demand relationship. At the same time, the effectiveness and feasibility of trading rule and bidding strategy were also verified.

Blockchain Integration and Its Impact on Renewable Energy

“…One noteworthy strategy is the creation of a decentralized power dispatching model using blockchain technology for grids with flexible loads and renewable energy sources to increase efficiency and reliability [63]. Furthermore, the research looks into blockchain-enabled solutions for the adoption of blockchains in the renewable energy supply chain, investment decision-making in green blockchain investments, and the transparent and secure trading of renewable energy certificates [64][65][66][67]. Together, these initiatives highlight how blockchain technology can completely transform the management of renewable energy sources, guaranteeing efficiency, security, and transparency in all areas of the sector.…”

“…Several articles explored several facets of blockchain-enabled trading in renewable energy. In a noteworthy study, a hybrid permissioned blockchain-based Renewable Energy Certificate (REC) trading system with continuous double auction rules to optimize pricing mechanisms, guarantee fair transactions, and maximize revenue for buyers and sellers was proposed by Wang et al [65]. Utilizing information entropy theory to measure uncertainty in wind power producer transactions, another study by Liu et al [71] presented the idea of uncertainty cost in day-ahead markets.…”

Blockchain-Based REC System for Improving the Aspects of Procedural Complexity and Cyber Security

“…However, a limitation of this study is the lack of consideration for transactions between nodes using the proposed model. [8]. Unlike previous research, multiple buyers and sellers were included in the simulations.…”

“…Zuo utilized the blockchain simulation program MultiChain to simulate a series of processes, including REC issuance, transactions, and renewable energy generation confirmation [7]. Wang et al applied the PBFT consensus algorithm of blockchain to the REC trading system, conducting simulations for REC purchases and sales [8]. Castellanos et al implemented a certificate trading market with MO on the Ethereum network using smart contracts [9].…”

Tokenizing Renewable Energy Certificates (RECs)—A Blockchain Approach for REC Issuance and Trading

“…In their research, blockchain is used to design a renewable energy power consumption voucher management method. To solve the problems of inefficient REC issuance and inflexible pricing, the authors in [18] proposed a hybrid REC trading system using permissioned blockchain and continuous double auction mechanism. The authors revised the view change protocol in the Practical Byzantine Fault Tolerance algorithm to improve system stability.…”