A Blockchain-Based Trading Framework for Community Electricity Market

Abstract

With the popularization of distributed energy resources, residents are able to trade electricity with each other as prosumers, promoting the emergence of community electricity markets with double auctions. Since these markets are small in scale, there is typically no authoritative market operating organization. Moreover, for the double auction market to last, budget deficits should not occur. To address these issues, this paper develops a blockchain-based trading framework for community electricity markets. A hierarchical architecture is established including a trading layer that supports prosumers and an incentive layer that encourages miners to maintain the blockchain system. Moreover, smart contracts are designed for prosumers and market operations. To resolve the budget deficit issue from the Vickrey-Clarke-Groves (VCG) mechanism with double auctions, an improved VCG double auction mechanism is developed with budget balance. Moreover, the improved mechanism retains the individual rationality and truthfulness properties of the original VCG mechanism. In addition, the possible budget surplus can be used as rewards for miners. A prototype is developed using the Ethereum platform. Case studies demonstrate the performance of the system and the budget balance of the improved mechanism.