Blockchain-Empowered Socially Optimal Transactive Energy System: Framework and Implementation
Qing Yang, Hao Wang

TL;DR
This paper introduces a blockchain-based decentralized transactive energy system that enhances security, privacy, and social optimality, demonstrating significant cost reductions through implementation and simulation.
Contribution
It proposes a novel blockchain framework for transactive energy, along with a decentralized trading algorithm that improves individual benefits and ensures social optimality.
Findings
Decentralized trading reduces individual costs by up to 77%.
Overall system costs are lowered by 24%.
Feasibility confirmed through IoT implementation and real-world data simulations.
Abstract
Transactive energy plays a key role in the operation and energy management of future power systems. However, the conventional operational mechanism, which follows a centralized design, is often less secure, vulnerable to malicious behaviors, and suffers from privacy leakage. In this work, we introduce blockchain technology in transactive energy to address these challenges. Specifically, we develop a novel blockchain-based transactive energy framework for prosumers and design a decentralized energy trading algorithm that matches the operation of the underlying blockchain system. We prove that the trading algorithm improves the individual benefit and guarantees the socially optimal performance, and thus incentivizes prosumers to join the transactive energy platform. Moreover, we evaluate the feasibility of the transactive energy platform throughout the implementation of a small-scale…
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