Lightweight Blockchain Framework for Location-aware Peer-to-Peer Energy Trading

TL;DR

This paper introduces a blockchain-based decentralized framework for P2P energy trading that considers proximity and reputation, enhancing privacy and security in smart grids.

Contribution

It presents a novel blockchain-enabled, fully decentralized market settlement mechanism incorporating proximity and reputation factors, along with an anonymous location proof algorithm.

Findings

Effective decentralized market settlement without central authority

Enhanced privacy through Anonymous Proof of Location

Improved trading efficiency considering proximity and reputation

Abstract

Peer-to-Peer (P2P) energy trading can facilitate integration of a large number of small-scale producers and consumers into energy markets. Decentralized management of these new market participants is challenging in terms of market settlement, participant reputation and consideration of grid constraints. This paper proposes a blockchain-enabled framework for P2P energy trading among producer and consumer agents in a smart grid. A fully decentralized market settlement mechanism is designed, which does not rely on a centralized entity to settle the market and encourages producers and consumers to negotiate on energy trading with their nearby agents truthfully. To this end, the electrical distance of agents is considered in the pricing mechanism to encourage agents to trade with their neighboring agents. In addition, a reputation factor is considered for each agent, reflecting its past performance in delivering the committed energy. Before starting the negotiation, agents select their trading partners based on their preferences over the reputation and proximity of the trading partners. An Anonymous Proof of Location (A-PoL) algorithm is proposed that allows agents to prove their location without revealing their real identity. The practicality of the proposed framework is illustrated through several case studies, and its security and privacy are analyzed in detail.