Game-theoretic peer-to-peer solar energy trading on blockchain-based transaction infrastructure

Abstract

The growing share of distributed, renewable resources in energy mix to combat climate change calls for a significant efficiency improvement through market-based solutions such as peer-to-peer (P2P) transactive energy systems. This paradigm shift requires an energy market that supports its functions through well-designed market rules and transaction infrastructure—the two ingredients that form a marketplace. Blockchain technology can facilitate the implementation of both market rules and transaction infrastructure for newly emerging P2P transactive energy markets. In this paper, we propose a model for the design of a transactive energy marketplace using blockchain as transaction infrastructure based on game-theoretic market rules that incentivize a more sustainable energy generation and consumption behavior while preserving the privacy of economic agents in the market. We propose a novel consensus mechanism named Proof-of-Reserve (PoR) to perform consumer-prosumer transactions and block mining activities on a distributed ledger. The model is numerically analyzed on a test system to illustrate its effectiveness. The results demonstrate the effectiveness of game-theoretic modeling in establishing market equilibrium and showcase the efficiency of blockchain technology in facilitating a functional, decentralized transaction settlement process.