A novel method for fully distributed sealed bid power trading in a network of islanded microgrids using consortium blockchains and a framework for its implementation

Abstract

Microgrids help in the better utilization of distributed energy resources. However, due to the intermittent nature of such resources, the net energy availability within microgrids varies with time. This adversely affects the power balance within microgrids, especially if energy storage systems or grid support are unavailable. In such cases, the microgrids in a locality can form a network to trade power among themselves. The most transparent and fair method is power trading using a double auction with sealed bidding. A novel method for sealed bid power trading using consortium blockchains that is entirely decentralized is introduced, ensuring better operational and data security. Here, all bidding data are shared twice. During bidding time, bids are shared by participating microgrids using one-way encryption and are added to the blockchain by all participants. After the bid closure, the respective microgrids share the same data unencrypted. By encrypting and comparing the bid data with the encrypted data already added to the blockchains, other participants can verify whether the microgrids have kept their bid data unmodified post-bid-closure. If the data has been kept unmodified, all participants add the bid data as verified data to their blockchain. Successful bids are then identified using a smart contract, and power transfer is effected accordingly. All power and monetary transactions are recorded distributively in blockchains. A decentralised framework for the implementation of the method is also envisaged. Further, a novel approach is proposed for distributively authenticating the blocks shared by participating microgrids using public and shared keys. The method and the framework are then successfully tested for decentralization, transparency, resilience, public verifiability, and transaction enforcement using simulations in a benchmark test system for networked microgrids.