Local market mechanisms survey for peer-to-peer electricity trading on blockchain platform

Abstract

Blockchain is a promising technology for local trading of the electricity. It has specific components, such as smart contracts, data ledger, consensus, and provides many benefits for both buyers and sellers because they are obtaining/generating electricity at better prices compared with the electricity from the public grid. This practice leads to a better integration of renewable energy sources, increasing the appetite for new local generation sources and storage facilities, transparency and trading opportunities for all market players. Grid operators also benefit from blockchain since the grid loading will be reduced as the grid does not have to transmit or distribute electricity from large power plants located far away from consumption place. In the end, the market players will benefit from reducing the grid loading and alleviating the congestions as onerous investment in grid infrastructure is avoided. In this paper, we will analyse the advantages of different electricity market mechanisms for trading and settlement. Several auction mechanisms such as pay-as-bid, uniform price, generalised second price or Vickrey-Clarke-Groves are taken into account as feasible options for local markets and peer-to-peer trading.