Electricity Purchase Research Articles

New Perspectives on Green Energy Defaults

This paper is an attempt to provide new perspectives on green energy defaults (GED) that promote the purchase of renewable energy electricity (REe) among consumers. We aim to complement existing studies and improve the understanding of GED, particularly when they are less, or unexpectedly, effective. To that end, we run a randomized controlled experiment and take the UK as a case study. We replicate the research design of previous lab experiments for comparative reasons. We also expand the analytical framework, identify key determinants and compare stated versus revealed preferences. Initial results indicate a lack of effectiveness across all treatment groups. This seems to challenge most of the existing lab experimental evidence and questions external validity claims. In addition to the actual treatments, current tariff agreements appear as significant determinants of choices. Nevertheless, when stated and revealed preferences are analysed, statistical tests revealed positive and significant differential effects, suggesting that the sole provision of an explicit, simple decision framework can trigger a greater adoption of REe, even in an opt-in treatment scenario. We thus argue that GED can still influence consumer decision-making in the desired policy direction. However, outcomes are likely to be context-specific so policy generalisations are not advisable. Building upon existing knowledge and our experimental results, we propose various motivational and contextual issues affecting consumer behaviour and thus the effectiveness and suitability of GED. They can offer guidance for future GED studies, particularly in countries in which market and consumer policy conditions for REe may be less advanced or certain.

Greening the cloud: oligopoly-driven institutional transformations of the US electricity grid for commercial and industrial power purchases

Abstract To power cloud data centres (DCs) with renewable energy (RE) Amazon, Apple, Facebook, Google and Microsoft negotiated innovative long-term contracts that opened up regional vertically integrated electricity utilities to allow new roles for large-scale suppliers and buyers of electricity. This transformation is explained using Williamson’s framework of institutional change linking the four interdependent institutional levels of embedded values, regulatory environment, (interfirm) governance and resource allocation. This framework is extended geographically by incorporating the regional and national interactions necessary for locating and spatially diffusing RE-driven DCs across the USA based on new power purchases and green tariff contractural agreements.

Prosumer Community Portfolio Optimization via Aggregator: The Case of the Iberian Electricity Market and Portuguese Retail Market

The participation of household prosumers in wholesale electricity markets is very limited, considering the minimum participation limit imposed by most market participation rules. The generation capacity of households has been increasing since the installation of distributed generation from renewable sources in their facilities brings advantages for themselves and the system. Due to the growth of self-consumption, network operators have been putting aside the purchase of electricity from households, and there has been a reduction in the price of these transactions. This paper proposes an innovative model that uses the aggregation of households to reach the minimum limits of electricity volume needed to participate in the wholesale market. In this way, the Aggregator represents the community of households in market sales and purchases. An electricity transactions portfolio optimization model is proposed to enable the Aggregator reaching the decisions on which markets to participate to maximize the market negotiation outcomes, considering the day-ahead market, intra-day market, and retail market. A case study is presented, considering the Iberian wholesale electricity market and the Portuguese retail market. A community of 50 prosumers equipped with photovoltaic generators and individual storage systems is used to carry out the experiments. A cost reduction of 6–11% is achieved when the community of households buys and sells electricity in the wholesale market through the Aggregator.

The Power of Customer Choice in Energy: A California Case Study in Accelerating Clean Energy Transitions

Despite a lack of action at the national level, the transition to carbon-free energy is becoming a reality across the United States. At the local level, community choice aggregators (CCAs)—which offer communities public control over their electricity purchasing decisions—are accelerating this transition. By forming these electricity providers, member cities and counties can choose how much renewable energy is offered to their residents and businesses. In California, CCAs have become an effective policy tool at accelerating the transition to clean energy. Across the state, 182 cities and counties have become members of one of the 23 CCAs, with additional communities planning to join or form CCAs in the next few years. These CCAs have been effective at unlocking market demand largely stifled by an investor-owned utility monopoly by giving cities and counties greater choice and access to renewable energy. The vast majority of these CCAs procure more renewable energy than the investor-owned utilities they compete with. As a result, CCAs purchased 204% of the renewable energy required by the state from 2011 to 2019. By achieving California’s carbon-free energy targets more quickly than mandated, the state benefits from a cumulatively larger reduction in greenhouse gas emissions each year. The success of CCAs in California demonstrates the power of promoting carbon-free energy at the grassroots, enabled by public, local choice in electricity supply. With six states considering CCA-enabling legislation, and with hundreds of cities and counties across the United States working toward a 100% carbon-free energy goal, policies like California Assembly Bill 117 (2002) that enabled CCAs can provide a valuable tool to accelerate the transition to carbon-free energy. The purpose of this paper is to assess how CCA-enabling policy can support the clean energy transition using California as a case study. We assess three conditions that affect a CCA’s ability to accelerate the clean energy transition: CCA customer characteristics, CCA design features, and their policy and regulatory context. We conclude with a discussion of policy recommendations important to ensure CCAs can continue to support clean energy goals.

Allocation strategy of regulated consumption quota ratio of renewable energy based on game theory

Fair and reasonable allocation of regulated consumption quota ratio (RCQR) of renewable energy is the foundation and key to guarantee the effective implementation of the mechanism associated with renewable energy consumption in China. Given this background, the allocation strategy of RCQR based on game theory is proposed for guaranteeing the consumption of renewable energy in this paper. In the proposed strategy, the RCQR of renewable energy for the market entities is allocated by determining the reasonable weights based on three proportional allocation methods (i.e., electricity consumption, electricity selling profits, and electricity purchasing cost) and the group satisfaction degree method. Then, game theory is used to coordinate the inconsistency of the four methods of determining weights. Finally, an allocation case of RCQR in Anhui, China is taken as an example for demonstration to verify the effectiveness and practicability of the proposed strategy. The simulation results show that the RCQR can be appropriately allocated by the proposed strategy, and it can be obtained that there is still a certain margin between the obliged consumption under the proposed strategy of each market entity and its maximum acceptable consumption.

Comparing CO2 emissions impacts of electricity storage across applications and energy systems

Summary Electricity storage systems can support the decarbonization of energy systems. However, the effect of electricity storage use on greenhouse gas emissions is complex because of roundtrip efficiency losses of the storage and its effects on the dispatch of different electricity-generation technologies. The limited literature examining this issue focus on individual electricity storage applications and the geographies where they are applied. Here, we systematically compare the effects of electricity storage on CO2 emissions across four applications in electricity systems resembling seven European countries. Our findings reveal large emission impact differences between applications and countries. Among other findings, we find that when compared with wholesale arbitrage, storing electricity in other applications exhibits much lower effects on CO2 emissions. We also investigate different policy options to reduce CO2 emissions from storing electricity. We find that although a higher carbon price can have a substantial effect on reducing the CO2 emissions from wholesale arbitrage, other applications require alternative approaches.

Lost Hills Solar Project: Powering an Oil and Gas Field with California Sunshine

Summary This paper outlines one of the first efforts by a major oil and gas company to build a net-exporting, behind-the-meter solar photovoltaic (PV) plant to lower the operating costs and carbon intensity of a large, mature oil and gas field. The 29 MWAC (35 MWDC) Lost Hills solar plant in Lost Hills, California, USA, commissioned in April 2020, covers approximately 220 acres on land adjacent to the oil field and is designed to provide more than 1.4 TWh of solar energy over 20 years to the field’s oil and gas production and processing facilities. The upgrades to the electrical infrastructure in the field also include new technology to reduce the risk of sulfur hexafluoride emissions, another potent greenhouse gas (GHG). Before the solar project, the Lost Hills field was importing all its electricity from the grid. With the introduction of the Innovative Crude Program as part of California’s Low Carbon Fuel Standard (LCFS) and revisions to the California Public Utilities Commission Net Energy Metering program, Lost Hills was presented with a unique opportunity to reduce its imported electricity expenses and reduce its carbon intensity, while also generating LCFS credits. The solar plant was designed to power the field during the day and export excess power to the grid to help offset nighttime electricity purchases. It operates under a power purchase agreement (PPA) with the solar PV provider and, initially, will meet approximately 80% of the oil field’s energy needs. Future plans include incorporating 20 MWh of lithium-ion batteries, direct current (DC)–coupled with the solar inverters. This energy storage system will increase the amount of solar electricity fed directly into the field and reduce costs by controlling when the site uses stored solar electricity rather than electricity from the grid. The battery system will also increase the number of LCFS credits by 15% over credits generated by solar alone. Together, solar power and energy storage provide a robust renewable energy solution. This project will generate multiple cobenefits for the Lost Hills oil field by lowering the cost of power, reducing GHG emissions, generating state LCFS credits and federal Renewable Energy Certificates, and demonstrating a commitment to energy transition by investing in renewable technology. Conceivably, the Lost Hills solar project can be a model for similar future projects in other oil fields, not only in California, but across the globe.

Optimal Electricity Allocation Model Under China's Planning-Market Double-Track Mechanism Considering Bidding Game of Generation Companies

In China, under the planning-market double-track mechanism implemented on the generation side of electricity, unreasonable market-oriented power generation proportion may lead to unnecessary vicious competition and market price changes, and it is against the will of power exchange (PX). Given this background, in this study, a bi-level model for planning-market electricity allocation that considers the bidding game of generation companies is proposed for a smooth transition of power system reform. In the upper level of the model, the proportion of planned electricity is optimized by PX to minimize the average social electricity purchase price. In the lower level of the model, considering the impact of market power on the bidding strategy of generation companies, the bidding strategy of generation companies set as price makers is proposed using the residual demand curve analysis method, while the price takers adopt the lowest bidding strategy. Simulations based on data from a provincial electricity market in China illustrate that the proposed model can effectively reflect the impact of market-oriented electricity proportion on market power and market-clearing price, thus providing a quantitative basis for PX to determine the proportion of market-oriented electricity in total electricity consumption.

Application to micro-cogeneration of an innovative dual fuel compression ignition engine running on biogas

• A CI dual fuel engine running on biogas is optimized by experiments and simulation. • The engine is optimized for a mid-size farm, requiring a micro-cogeneration system. • The farm can self-produce all the biogas, becoming almost energy independent. • The proposed engine is 20% more efficient than a corresponding SI biogas engine. • Cogeneration + biogas provide a net actual value after 15 years of 1340 k€. Renewable sources and enhancement of energy conversion efficiency are the main paths chosen by the European Community to stop climate changes and environmental degradation, and to enable a sustainable growth. For this purpose, the construction of a new and more dynamic electricity distribution network is mandatory. This “smart grid” should also include small and medium-size companies, able to program the generation and use of energy from renewable sources (the so-called "prosumers"). In this frame, micro-cogeneration (rated electric power up to 50 kW) is one of the most promising techniques. In this work, the application to micro-cogeneration of an innovative Compression Ignition internal combustion engine, operated in Dual Fuel mode is proposed. Thanks to the specific combustion system (Reactivity Controlled Compression Ignition, RCCI: a lean homogenous mixture of air and biomethane or biogas is ignited by the injection of a small amount of Diesel fuel), brake thermal efficiency can be increased at all operating conditions, compared to a conventional Spark Ignition engine running on biomethane or biogas. The ensuing reduction of CO 2 emissions is higher than 20%. Furthermore, the proposed engine can tolerate larger variations in the composition of the biogas, without a significant drop of thermal efficiency. Finally, in case of emergency, it is able to run on Diesel fuel only. The use of the engine is particularly suitable for a company operating in the agricultural field, such as a mid-size farm, that is able to produce biogas for its self-consumption. Therefore, a representative study case is selected, and the corresponding electrical and thermal energy needs are analysed throughout a typical year. The energetic analysis leads to the identification of the most suitable engine size and calibration settings, in order to reduce the purchase of electricity and natural gas, maximizing the use of the company's own renewable sources (biogas or biomethane). The final goal of the optimization process is to create a virtuous system, that can reduce the environmental impact and make the company almost independent from the energetic point of view.

Economics of Battery Use in Agriculture: Economic Viability of Renewable Energy Complemented with Batteries in Agriculture

The production of renewable energy fluctuates in terms of sun and wind and must be supplemented by storage in the system. On an individual basis, i.e., for centralized electricity production and predominantly self-consumption, the use of batteries is considered here. Possible future development scenarios were simulated based on current price relationships (status quo). In the status quo, a selling price for PV electricity of 13 Euro cents (ct)ct/kWh was assumed with a production cost of 11 ct/kWh. The selling price of wind power is 5 ct/kWh with a production cost of 3 ct/kWh. The cost of storing electricity in a battery increases the price by 33 ct/kWh. A price of 20 ct/kWh is assumed for electricity purchases by companies. In the status quo, the use of batteries is not economical given the assumed price relationships. Changing the framework conditions, such as those of the legislature in Germany with the nuclear power phase-out and in the EU with the coal exit and decarbonization, will lead to increased availability of (fluctuating) renewable electricity, especially during the day. The purchase of electricity at other times, when the supply is scarce, can lead to increased electricity prices, especially at night. Together with falling costs for storage, the use of batteries for centralized power generators could be very interesting in the future. The method used in this study is nonlinear optimization of the target function costs of electricity supply in the developed simulation model. The results can also be transferred to other countries, as the assumed trends apply worldwide.

Rethinking solar PV contracts in a world of increasing curtailment risk

Curtailment of solar photovoltaics (PV) could increase significantly as PV composes greater shares of grid capacity. Curtailment risk—the possibility that future curtailment levels exceed projections—poses a challenge to PV project economics. PV industry stakeholders have begun to develop new contract structures that may address curtailment risk more optimally than conventional structures. Using a simplified theoretical framework and modeled results, we analyze PV project economics in the context of increasing curtailment risk under alternative contract structures with fixed and time-of-delivery payments. We show that both alternative structures tend to shift curtailment risk from generators to electricity buyers. Electricity buyers—particularly utilities—may be willing to bear that additional risk in order to reap higher and more diverse project values facilitated by fixed-payment and time-of-delivery contracts. Our results suggest that these alternative structures provide new ways to redistribute curtailment risk in the context of increasing PV curtailment.

Grid-connected Micro-grid Power Supply and Distribution Transformer Capacity Optimization System Design in the Electricity Sales Environment

With the current gradual opening of our country’s electricity sales market and the successive improvement of related policies for grid-connected micro-grids, grid-connected micro-grid power supplies and their distribution transformer capacity have received attention and development. Based on the good development of my country’s electricity sales market environment, this paper designs the grid-connected microgrid power supply optimization system and its distribution and conversion capabilities to optimize the quality of electricity sales and optimize the grid configuration. In view of the fact that the operation of the microgrid system in my country’s market environment is more flexible at this stage, after a long time simulation test, a simulation analysis of the operation status of the grid-connected microgrid is carried out. In the course of the experiment, the electricity price in the distribution point process and the real-time changes of the electricity purchase price in the market will be considered comprehensively, and the processing in the micro-electricity system based on its distribution transformer capacity optimization system and the load forecast result will be considered. This article uses a power grid project actually constructed in East China as an example to analyze the results of simulation calculations. Then the NSGA-II algorithm is used to solve the optimized model for the cost and benefit composition of the grid. The optimized configuration method of the optical storage microgrid proposed in this paper can ensure the reliable power supply of users’ important loads during the off-grid operation of the microgrid, increase the installed capacity of distributed photovoltaics, and the configured energy storage system also allows enterprises to achieve low electricity prices. Purchase electric energy at any time and use it to supplement the load’s demand for electric energy during peak electricity price periods, thereby increasing revenue. The experimental research results show that the design of the grid-connected microgrid power supply capacity optimization system under the electricity sales environment studied in this paper can effectively reduce the additional investment required by external loads and the capacity of optical storage and distribution transformers. Only then can the economic marketing profit of the microgrid be improved to a certain extent.

Coordinated charging and discharging control of electric vehicles to manage supply voltages in distribution networks: Assessing the customer benefit

Increased worldwide uptake of Electric Vehicles (EVs) accentuates the need for developing coordinated EV charging and discharging methods that mitigate detrimental and sustained under-voltage and over-voltage conditions in distribution networks. In this paper, a centrally coordinated EV charge-discharge scheduling method is proposed, referred to as Network-aware EV Charging (and Discharging) N-EVC(D), that takes into account both EV customer economics and distribution grid constraints. Specifically, N-EVC(D) is designed to maintain quasi-steady-state feeder voltages within statutory power quality limits, while minimizing EV customer operational costs associated with: (1) purchasing (or otherwise being compensated for delivering) electricity on a time-of-use tariff; and (2) battery degradation due to frequent charging and discharging. The optimization problem for N-EVC(D) is formulated as a quadratic program, with voltage constraints to limit voltage variability across a radial distribution feeder, and individual EV constraints to satisfy heterogeneous EV charge requirements. In N-EVC(D), each grid-connected EV follows an operator-specified battery schedule that is obtained by solving the proposed quadratic program. A receding horizon implementation is also proposed to support near-real-time N-EVC(D) operations while accommodating non-deterministic EV arrivals and departures. The benefits of N-EVC(D) are assessed by means of numerical simulations carried out on an IEEE test feeder populated with a real-world dataset of residential load collected from households within an Australian distribution network. The simulation results confirm that N-EVC(D) mitigates non-compliant voltage deviations that would otherwise occur when voltage constraints are not enforced. Compared to uncoordinated EV charging, N-EVC(D) offers a 92% – 111% reduction in the operational costs incurred by EV customers.

Citizen science as a tool for arboviral vector surveillance in a resourced-constrained setting: results of a pilot study in Honiara, Solomon Islands, 2019

BackgroundRecent arboviral disease outbreaks highlight the value a better understanding of the spread of disease-carrying mosquitoes across spatial-temporal scales can provide. Traditional surveillance tools are limited by jurisdictional boundaries, workforce constraints, logistics, and cost; factors that in low- and middle-income countries often conspire to undermine public health protection efforts. To overcome these, we undertake a pilot study designed to explore if citizen science provides a feasible strategy for arboviral vector surveillance in small developing Pacific island contexts.MethodsWe recruited, trained, and equipped community volunteers to trap and type mosquitos within their household settings, and to report count data to a central authority by short-message-service. Mosquito catches were independently assessed to measure participants’ mosquito identification accuracy. Other data were collected to measure the frequency and stability of reporting, and volunteers’ experiences.ResultsParticipants collected data for 78.3% of the study period, and agreement between the volunteer citizen scientists’ and the reviewing entomologist’s mosquito identification was 94%. Opportunity to contribute to a project of social benefit, the chance to learn new skills, and the frequency of engagement with project staff were prime motivators for participation. Unstable electricity supply (required to run the trap’s fan), insufficient personal finances (to buy electricity and phone credit), and inconvenience were identified as barriers to sustained participation.ConclusionsWhile there are challenges to address, our findings suggest that citizen science offers an opportunity to overcome the human resource constraints that conspire to limit health authorities’ capacity to monitor arboviral vectors across populations. We note that the success of citizen science-based surveillance is dependent on the appropriate selection of equipment and participants, and the quality of engagement and support provided.

НАПРЯМИ РЕФОРМУВАННЯ РИНКУ ЕЛЕКТРОЕНЕРГІЇ

The article analyzes the current state of reforming of the electricity market of Ukraine, the basis of which is the new electricity market introduced on July 1, 2019. The purpose of the article is to reveal the main factors and trends that affect the reform of the electricity market of Ukraine at the present stage and substantiate proposals for solving the problems of this industry. Ensuring of the development of competition became the key element of the market reform. In addition, Ukraine pledged to the European Union to reform the energy market, that became the reason for the allocation of five hundred million euros of financial assistance. The developed new market has established the following rules. Thus the control of state enterprise “Energymarket” over the production and sale of electricity was eliminated. Instead of one monopolist, two new entities entered the market. The first provided the activities and organization of contracts for the purchase and sale of electricity on the market according to the principle of "day ahead", or on the intraday market that is called market operator. The second one is involved into the purchase of "green" energy from the manufacturer, namely solar and wind, and is called SE "guaranteed buyer". Regional energy supply companies were reorganized into operators of electricity distribution system. On the basis of the existing regional power companies, new enterprises for electricity supply were created, which led to an increase in the number of players on the market after its reformation. At the same time, a wholesale market was created, the segments of which included bilateral contracts, exchange of contracts for physical supply, exchange of financial contracts, as well as the balancing market and the market of additional services. However, it is established that in order to improve the situation with energy sector, the Verkhovna Rada needs to resolve the differences between the Law of Ukraine “On Joint Stock Companies” and the Law of Ukraine “On Management of State-Owned Objects”. Attention should be paid to building of the institutional capacity of State Enterprise Ukrenergo. All this requires from the Verkhovna Rada to adopt such laws that would create optimal conditions for the activities of joint stock companies, call off double taxation, improve the stock market and the capital market. Reformation of the energy sector requires improving of the independence and efficiency of the regulator in this sector. Thus the issue appeared about whether the regulator is able to issue a certificate of NPC Ukrenergo as a body with special responsibilities. And this is a crucial condition for the integration of the Ukrainian energy system into ENTSO-E. That is why the Cabinet of Ministers of Ukraine must create an independent regulator that meets the criteria of the Energy Community.The Ukrainian authorities need to find sources to pay the debt in the electricity market, which will greatly simplify the procedure for its output.

Financial analysis of raw material supply chain for power plant using renewable palm biomass

This study aims to determine the level of economics of the capacity of electricity generation and the amount of raw materials required for solid waste of palm oil for the most optimal power plant. The research begins with literature studies related to the characteristics of waste oil, the structure of investment financing, operational costs and renewable energy reference price. The next stage is a field survey to choose the location as a research object, then proceed with processing and analyzing data with financial feasibility methods. Financial feasibility analysis is conducted in the case of East Kalimantan Province. PLN purchase price for East Kalimantan region is around IDR 1,450 per kWh. The result of financial feasibility analysis of the project on the 10% discount factor assumption (IDR), capital cost 2,300 USD/kW obtained NPV of IDR 329.154.609.386, IRR value of 21.57%, investment rate of 5.15 years, and generating cost of IDR 521, 41 or 3.89 cent USD/kWh. Next is the sensitivity analysis of power plant projects from renewable raw materials to changes in capital cost, O/M cost, calorific value and price of raw materials of palm oil, electricity purchase price and capital composition.

Оптимизация энергоснабжения производственного комплекса с использованием возобновляемых источников энергии

The usage of renewable energy sources and energy storage devices allows an enterprise to reduce its electricity supply costs. Significant savings can be achieved only in the case of a well-organized system of managing energy flows of the enterprise and electricity consumption. The puprpose of the study was to analyze the existing storage devices and renewable energy sources, and on the basis of the analysis, introduce an approach to organizing energy supply of the enterprise based on the usage of storage devices and renewable energy sources. The approach introduced implies the electricity purchase schedule curve optimization to minimize the total costs. The purchase schedule curve optimization for the case of energy storage usage is an ill-posed problem. Within the framework of solving the problem, the form of the curve was formalized to a piecewise constant function, which made it possible to solve it by applying multi-criteria optimization based on a modified method of directed random search. We analyzed a model case, for which an optimal purchase schedule curve was obtained using storage devices and solar panels, and the achievable economic effect from their use was graphed. The maximum value of operational costs, which makes the usage of energy storage and renewable energy source efficient, was found

Spot trading strategy considering multiple constraints for electricity retailers

In order to solve the inert trading and irrational trading of electricity retailers in the spot market trading environment, increase the income of electricity retailers and reduce transaction risk, a spot trading strategy considering multiple constraints for electricity retailers is proposed. Similar days are selected by analyzing the date type and the temperature difference of the spot market trading day, on the basis of similar days, the electricity consumption information of electricity retailers’ agent users, day-ahead and real-time electricity price of sport trading market are predicted, combing the user-side excess profit recovery fee, mid-to-long term shortage recovery fee and mid-to-long term curve deviation recovery fee restrictions in Shanxi Province spot trading rules, optimize the mid-to-long term daily 96 points daily electricity purchase curve and day-ahead 96 points daily electricity biding curve, and use the real data of Shanxi spot market transactions to calculate the multi-day income of the electricity retailers to verify the practicability of the spot trading strategies.

The Effects of Electricity Sources on the Cost of Electricity in Panama

The purpose of this study is to identify which electricity production sources have a significant effect on the marginal cost of electricity in Panama. Panama, like most Central American countries, relies on hydroelectric power, thermoelectric power and electricity purchases. We only collected secondary data provided by the official entities in order to ensure that the numbers used for the study were consistent. Linear regression analysis was used to find the model that describes the behavior of the marginal cost more accurately. The findings of the study confirm the need for less oil-dependent electricity production alternatives in order to achieve lower electricity prices in Panama.

Residential energy trading with blockchain technology

Blockchain technology is a peer-to-peer value transfer technology that guarantees the safety and correctness of transactions between parties who do not trust each other without a universally trusted entity. Because of this characteristic, we study possible integration of blockchain technology with a local neighborhood power grid, to design a truly decentralized energy trading market. The proposed design allows energy producers within the local power networks to safely transact with neighborhood households. In other words, the users who have a redundant amount of power can sell it to users who need power at a fairer price, than is offered by a utility company. We show that such local trades provide benefits to both electricity buyers and sellers. This paper does two things: (1) establishes a mathematical game theory model for the users’ decision to buy or sell power in the peer-to-peer energy market and (2) discuss blockchain software stack for deploying such a system. For the first part, we use a smart algorithm built upon KKT conditions to solve the multi-level game theory model. Secondly, we show how the electricity price offered by the central company is influenced by the introduction of the blockchain to the power transaction system. As supporting evidence we provide experimental data—the simulation of the market and its infrastructure using blockchain Hyperledger’s Fabric framework. Finally, we found that the electricity price can decrease dramatically by allowing peer-to-peer transactions among prosumers and consumers unless the amount of generating power from prosumers is much lower than their demand. We foresee a great future for the applications of blockchain technology in this area with the increasing mass adoption of solar and renewable generation at the consumer level. However, these processes will enact more discussions on power delivery grid ownership and its public access, usage, and management.