Blockchain-based microgrid market and trading mechanism

Abstract

In this study we proposed a Blockchain-based distributed power generation trading system and its trading mechanism. By utilizing the linear supply bidding we prove that a market under assumption has a competitive equilibrium where each generator within the microgrid maximizes its profit, each load's demand is fulfilled and the welfare of whole microgrid has been maximized. Additionally we introduced a distributed supply bidding algorithm to solve the global welfare optimization. Last but not least, we designed a trading system architecture where each market participant is abstracted as a virtual agent and continuously interacting with each other by exchanging information through a smart power contract. Combining with our distributed algorithm, the microgrid market can reach its competitive equilibrium gradually. A numerical study is conducted on a simplified microgrid to demonstrate the effectiveness of our study.