Devising a trading mechanism with a joint price adjustment for local electricity markets using blockchain. Insights for policy makers

Simona-Vasilica Oprea and Adela Bâra

Energy Policy, 2021, vol. 152, issue C

Abstract: The new potential of Distributed Energy Resources (DER), residential consumers, buildings, and prosumers in terms of controllable devices, self-generation, and storage makes them more active in the market encouraged by lower electricity prices. In addition, integrating a higher volume of volatile Renewable Energy Sources (RES) that unstress the public grid by local trading interactions is a desirable target of Local Electricity Markets (LEM). In this paper, we propose a blockchain trading mechanism to simulate the electricity transactions for 11 modern smart houses with more than 300 appliances, 8 roof- or faced-PV systems, and smart-metered 15-min readings that form a small-size community. The electricity generated at the community level lowers the electricity bills and brings benefits for prosumers (sellers) and consumers (buyers). Several trading mechanisms for LEM transactions including auctions such as Uniform Price (UP), Pay-As-Bid (PAB), Generalized Second-Price (GSP), Vickrey-Clark-Groves (VCG) methods are implemented to evaluate the benefits and show their efficiency. After the market is initially cleared, an adjustment coefficient of the price is proposed for both sides (seller and buyer) to enlarge the trading potential at the community level using blockchain technology. It proves to bring excellent results to the LEM participants and enhance trading with outstanding benefits.

Keywords: Blockchain; Community trading; Auction; Price mechanism; LEM; Joint price adjustment (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:152:y:2021:i:c:s0301421521001063

DOI: 10.1016/j.enpol.2021.112237

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