Review of Blockchain Enabled Decentralized Energy Trading Mechanisms

Abstract

With special emphasis being put upon renewable sources of energy day-by-day, there is a growing demand for this new technology to be integrated into the existing framework. To be widely accepted and made sustainable, such a technology should be profitable for all participating entities; giving them incentive enough to continue using it. What remains to be answered is the question of how that will be done. We break down the traditional power grid into smaller clusters, called microgrid and discuss its properties as potential candidates for implementing Blockchain powered energy trading mechanisms. Blockchain enabled technology is chosen as it brings with it, a degree of security, transparency and automation; and cuts out the established monopoly with the decentralized network and peer-to-peer trading. Two such working algorithms are reviewed for their implementation into the microgrid. One algorithm works on an auction model while another is a calculative data-dependent model but both the models function using smart contracts. Pre-existing projects in this field and their implementation around the world are reviewed by us in the later section of the paper. We conclude this paper by encapsulating the deployment considerations and limitations of employing Blockchain technology in a microgrid.