Researchers from Monash University and Queensland University of Technology (QUT) have proposed a blockchain-enabled peer-to-peer (P2P) energy market that rewards those who trade with “energy neighbours”.
P2P energy trading facilitates the integration of a large number of small-scale producers and consumers into the energy market but is still in its infancy and is challenging to manage.
Blockchain technology, however, offers an opportunity for an improved market framework that is decentralised, trustworthy and anonymous. It allows energy producers and consumers to directly negotiate and trade energy without relying on a trusted third party, enabling a transparent transaction and allowing all participants to save money.
In their research paper, Mohsen Khorasany and Reza Razzaghi from the Monash Energy Institute, together with Ali Dorri and Raja Jurdak from QUT, make the case for a secure and privacy-preserving environment for decentralised energy trading between producers and consumers.
“We utilise a grid service charge, defined based on the electrical distance, to encourage participants to trade energy locally, thereby receiving the best price for their energy and reducing the overall power loss or possibility of overloading electricity grid lines,” said Research Fellow, Dr Mohsen Khorasany from the Department of Electrical and Computer Systems Engineering.
Both producers and consumers are encouraged to negotiate on energy trades locally with nearby agents to bring down the overall energy price. The electrical distance of agents is a key factor in calculating the grid service charges and makes it appealing to agents who trade with their neighbouring agents by receiving a competitive price.
“This approach also takes into account a reputation factor for each participant, based on past performances in delivering the committed energy quota. This ensures that prior to negotiations, participants are able to select their trading partners based on their preferences over the reputation and proximity of the trading partners,” explains Dr Reza Razzaghi from the Department of Electrical and Computer Systems Engineering.
By moving to a fully decentralised market framework, participants no longer need to rely on a centralised entity for their energy trades. This, in turn, preserves the participants' privacy, as they do not need to reveal their private information.