Decentralized Blockchain-Based Peer-to-Peer Energy-Backed Token Trading for Active Prosumers

This paper designs and models a fully decentralized peer-to-peer energy token market for small-scale prosumers using blockchain technology in a smart grid environment in the presence of the demand response program (DRP) and demurrage mechanism. As the market players, prosumers in the local distribution network are considered in two groups, producers (sellers) and consumers (buyers). Using smart contracts, all sellers and buyers in the proposed market can engage in bilateral energy token transactions with each other under an agreed price and with the retail market at a certain price. Furthermore, the local consumers can participate in price-based DR programs and shift their consuming load to the periods with high local generation. demurrage mechanism is applied to avoid energy token accumulation and enhance attraction for local transactions. With demurrage in place, the redemption value of energy-backed tokens reduces with time. A fully decentralized approach called the primal-dual sub-gradient method is developed to clear this fully decentralized energy market in the presence of DRPs and demurrage. The proposed market-clearing scheme guarantees the global and feasible solution without requiring the players’ private information. Numerical studies demonstrated the feasibility and effectiveness of the proposed energy token market and the decentralized approach for its clearing