Blockchain-Enabled Smart Contract Architecture for Optimal Energy Routing in Smart Grids Using Graph-Theoretic Loss Minimization

Abstract

The integration of renewable resources and prosumers into smart grids poses challenges related to scalability, transparency, and transmission efficiency. Centralized routing frequently depends on expensive technology and experiences significant losses. This study presents a blockchain-based smart contract system (BSCS) that reduces transmission losses while guaranteeing secure and decentralized energy transfers. The smart grid is represented as a weighted directed graph, with edges denoting actual power losses. Dijkstra’s shortest path algorithm generates optimal paths from the generator to the consumer with minimal loss. These optimal pathways are permanently documented and regulated by permissioned blockchain smart contracts, ensuring tamper-proof and verifiable energy settlement. Validation is performed using an enhanced IEEE 58-bus test system, which is based on the standard IEEE 57-bus network, by incorporating an additional synthetic consumer node (Bus 58) linked to Bus 12 to simulate a flexible prosumer load of 1.5 MW + 0.5 Mvar. Additionally, the synthetic consumer node employs Ganache, Truffle, and Solidity for its implementation. This modification facilitates the assessment of dynamic energy routing and decentralized transaction settlement in extended topology scenarios. The proposed BSCS demonstrates substantial enhancements compared to baseline blockchain systems. Active power losses in transmission lines are diminished, gas consumption declines by approximately 12%, latency is enhanced by as much as 21%, and throughput increases by more than 30%. The rapid deployment and execution of smart contracts within sub-second intervals validate the system's appropriateness for real-time grid operations. The proposed technique combines graph-theoretic optimization with blockchain governance to provide a safe, scalable, and hardware-independent framework for decentralized energy markets.