Blockchain Enabled Decentralized Local Electricity Markets With Flexibility From Heating Sources
Weiqi Hua, Yue Zhou, Meysam Qadrdan, Jianzhong Wu, Nick Jenkins
Abstract
Electric power systems are transitioning towards a decentralized paradigm with the engagement of active prosumers (both producers and consumers) through using distributed multi-energy sources. This paper proposes a novel Blockchain based peer-to-peer trading architecture which integrates negotiation-based auction and pricing mechanisms in local electricity markets, through automating, standardizing, and self-enforcing trading procedures using smart contracts. The negotiation of the volume and price of the peer-to-peer electricity trading among prosumers is modeled as a cooperative game, and the interaction between a retailer and its ensemble of prosumers is modeled as a Stackelberg game. The flexibility provision from residential heating systems is incorporated into the energy scheduling of prosumers. Case studies demonstrate that the proposed architecture in local electricity markets helps improve local energy balance. Flexibility from the residential heating systems enables prosumers to be more responsive to the variation of retail electricity prices. The proposed model reduces 41.24% of average daily electricity costs for individual prosumers or consumers compared to the case without the peer-to-peer electricity trading.