Agent-Based Model of a Blockchain Enabled Peer-to-Peer Energy Market: Application for a Neighborhood Trial in Perth, Australia

Jacob G Monroe,Emily Zechman Berglund,Paula Hansen,Matthew Sorell

doi:10.3390/smartcities3030053

Jacob G Monroe, Emily Zechman Berglund + Show 2 more

Open Access

https://doi.org/10.3390/smartcities3030053

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Abstract

The transfer of market power in electric generation from utilities to end-users spurred by the diffusion of distributed energy resources necessitates a new system of settlement in the electricity business that can better manage generation assets at the grid-edge. A new concept in facilitating distributed generation is peer-to-peer energy trading, where households exchange excess power with neighbors at a price they set themselves. However, little is known about the effects of peer-to-peer energy trading on the sociotechnical dynamics of electric power systems. Further, given the novelty of the concept, there are knowledge gaps regarding the impact of alternative electricity market structures and individual decision strategies on neighborhood exchanges and market outcomes. This study develops an empirical agent-based modeling (ABM) framework to simulate peer-to-peer electricity trades in a decentralized residential energy market. The framework is applied for a case study in Perth, Western Australia, where a blockchain-enabled energy trading platform was trialed among 18 households, which acted as prosumers or consumers. The ABM is applied for a set of alternative electricity market structures. Results assess the impact of solar generation forecasting approaches, battery energy storage, and ratio of prosumers to consumers on the dynamics of peer-to-peer energy trading systems. Designing an efficient, equitable, and sustainable future energy system hinges on the recognition of trade-offs on and across, social, technological, economic, and environmental levels. Results demonstrate that the ABM can be applied to manage emerging uncertainties by facilitating the testing and development of management strategies.

Highlights

Distributed energy resources (DER) are transitioning modern electric grids by shifting generation from utilities to the end-users [1]
The agent-based modeling (ABM) was applied to simulate the existing RENeW Nexus trial and to explore alternative market structures that can affect market outcomes, based on electricity price and the amount of energy exchanged in the market
The validation of the ABM for the RENeW Nexus case study provided the foundation for a critical analysis of P2P energy market structures

Summary

Introduction

Distributed energy resources (DER) are transitioning modern electric grids by shifting generation from utilities to the end-users [1]. The introduction of the prosumer has the potential to place a large share of the generation market into the hands of those at the grid edge [4] This transfer of market power has created the need for a system that can better manage distributed generation (DG) of electricity [1,5]. P2P energy trading provides a free-market system for prosumers to exchange excess electricity with neighboring consumers at a pre-arranged price [6,9]. Online P2P energy trading platforms may add new value to renewable electricity generation while encouraging conservation of natural resources [4,8,10]. A variety of potential P2P market configurations exist, it may generally be described as the flexible trading of excess energy from small-scale DER among customers in a neighborhood [23]. A central motivator for the transdisciplinary interest in P2P trading has been cost optimization, and potential cost savings for communities and their members are frequently cited (e.g., 4, 5)

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