Blockchain-enabled Local Energy Markets as Climate Resilience Infrastructure: A Welfare-Based Framework for Distributed Flexibility, Storage and Community Energy Trading

Phoebe Koundouri and Stathis Devves
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Phoebe Koundouri: Dept. of International and European Economic Studies, Athens University of Economics and Business

No 2620, DEOS Working Papers from Athens University of Economics and Business

Abstract: Climate change, increasing electrification, energy-price volatility, and growing dependence on variable renewable resources are increasing the exposure of local and regional energy systems to economic and operational disruptions. Strengthening climate resilience therefore requires systemic approaches capable of integrating distributed flexibility, behavioural adaptation, local market coordination, and digital governance. This study develops an integrated behavioural-economic-technical framework for evaluating residential prosumers participating in blockchain-enabled local electricity markets under dynamic pricing. The model operates over an annual 8,760-hour horizon and combines endogenous utility-based demand response, photovoltaic generation, battery storage, grid interaction, peer-to-peer (P2P) energy trading, battery degradation, and multidimensional welfare assessment. Three progressively more intelligent battery dispatch strategies-a fixed rule-based strategy, an adaptive forecast-based strategy, and a 24-hour rolling-horizon optimisation strategy-are evaluated for four storage capacities of 10, 15, 20, and 30 kWh under identical assumptions and performance indicators. Results show that dispatch intelligence is generally more influential than battery size alone in determining grid dependence, renewable self-consumption, price responsiveness, and welfare allocation. Strategy A exhibits strong capacity saturation, Strategy B produces the strongest capacity-dependent response and buyer-oriented redistribution of P2P benefits, while Strategy C provides a more balanced compromise between prosumer welfare, market participation, and storage utilisation. Fourier decomposition further identifies systematic intraday periodicity in elasticity, P2P price reductions, and participant utilities, revealing temporal market dynamics that are not captured by annual indicators alone. A utility-based clearing-price benchmark additionally quantifies the distribution of welfare between buyers and selling prosumers, while a hierarchical welfare decomposition separates behavioural utility, conventional grid-related surplus, and decentralised P2P welfare. Overall, the findings demonstrate that distributed storage, intelligent dispatch, and blockchain-enabled local trading can reduce exposure to wholesale-market volatility, increase local renewable utilisation and energy autonomy, and strengthen the adaptive capacity of energy communities. The framework therefore interprets distributed flexibility not merely as an optimisation resource, but as a form of local climate-resilience infrastructure supporting more adaptive, decentralised, and inclusive energy transitions

Keywords: Climate resilience; Peer-to-peer electricity Trading; Battery energy storage systems; Prosumer utility; Blockchain-enabled energy markets; Distributed energy flexibility (search for similar items in EconPapers)
Date: 2026-08-23
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