Two Novel Blockchain-Based Market Settlement Mechanisms Embedded Into Smart Contracts for Securely Trading Renewable Energy

Abstract

The progress of ICT technologies, day-ahead forecast, home energy management systems, implementation of smart meters, and Distributed Energy Sources (DER) enables new business opportunities for prosumers to locally trade the surplus via blockchain platforms leading to considerable advantages at the community level. The current research handles settlement similar to a centralized market that it is not necessarily the best solution for blockchain. Nonetheless, the settlement is essential as sellers and buyers perceive the attractiveness of the local trading through the market results. In this paper, we propose two novel and efficient settlement mechanisms (Global Balancing Settlement GBS and Splitting Settlement SS) for Peer-to-Peer (P2P) electricity exchange enhancing the performance of the classic Pairwise Settlement PS. These will be written as stored procedures embedded into the smart contracts along with auctioning procedures. The simulations are performed using a small residential community with 30% of the electricity that can be locally traded to lower the bills and unstress the public grid. The performance of the two proposed settlement methods is proved by the 14 scenarios that thoroughly indicate that GBS and SS provide better results for both sellers and buyers than PS. In the reference scenario, with GBS, sellers have the highest encashments with almost 4% more, whereas buyers encounter the lowest payments with almost 5% less than in case of the classic settlement. Starting from reference scenario, alternative scenarios are envisioned to extend the analyses and assess the performance of the settlement mechanisms. The highest gain is recorded with GBS mechanism: almost 8.8% for sellers and 6.5% for buyers. Another interesting outcome is that GBS is providing better results than SS. When deviations are small, SS provides almost 6% gain for both sellers and buyers, but when they increase, the gain is exceedingly small or none.

Applications of Blockchain Technology in Modern Power Systems: A Brief Survey

“…The verification results show that this scheme can improve the flexibility and profitability of trading. Oprea et al [77] proposed two novel and efficient P2P power exchange settlement mechanisms (global balancing settlement and split settlement), and applied them to a small residential community scenario. The verification results show that the two new mechanisms can improve the performance of classic pairwise settlement.…”

A Survey on Blockchain-Based Telecommunication Services Marketplaces

“…The trading data analysis helps to regulate electricity trading prices, thus increasing the efficiency of prosumer-generated electricity. In [164] authors provide a detailed analysis of blockchainbased settlement mechanisms called Global Balancing Settlement (GBS) and Splitting Settlement (SS). These settlement mechanisms are implemented as smart contracts stored on the blockchain.…”

Application of Distributed Ledger Technology in Distribution Networks

“…Transparency and immutability, and auditability are also favorable features of DLT for P2P energy trading [66]. With proper designs, DLT-based P2P energy trading can be scalable [67], [68], secure [69], [70] and with good privacy protection as well [71]. Furthermore, DLT-based smart contracts, with the features of good reusability and automatic execution, can reduce the contracting, enforcement and compliance costs [18], being ideal for P2P energy trading usually involved with large numbers of low-value transactions between small-scale DERs.…”