EnergiPay: Off-chain Payment Channel for Blockchain-enabled Peer-to-peer Energy Trading

Abstract

P2P energy trading allows direct energy transactions among end users to maximize the benefits of distributed energy resources. Permissionless blockchain platforms (e.g., Ethereum) facilitate P2P energy trading through energy credit tokenization, such that users who export energy to the grid will receive the respective energy credit tokens on Ethereum that can be traded in a P2P fashion without an intermediary. Despite the benefits of P2P trading on a trustless open platform, blockchain-enabled P2P energy trading suffers from a number of practical issues, such as slow transaction confirmation time, poor scalability, high transaction fees for micro-transactions, and the need for persistent connections to the blockchain. Hence, we develop an off-chain payment solution to allow trustless off-chain transactions of energy credit tokens, in the similar vein as popular off-chain payment channel networks for Bitcoin cryptocurrencies (e.g., Lightning Network). But unlike typical cryptocurrencies, off-chain trading of energy credit tokens faces new challenges. Particularly, energy credit tokens are essentially future commodities that are generated ex-post from delayed smart meter reporting. It is challenging to support real-time P2P energy trading with future energy credit tokens that are not yet generated at the moment of trading, which significantly increases the counterparty risks among untrusted users. In this paper, we design EnergiPay, a secure off-chain payment channel protocol to mitigate the counterparty risks in off-chain P2P energy trading.