Privacy-Preserving Billing for Local Energy Markets

TL;DR

This paper introduces a privacy-preserving billing protocol for local energy markets that ensures accurate, decentralized bill computation while protecting participant privacy against internal collusion, with practical performance benchmarks.

Contribution

It presents a novel, efficient, and secure protocol combining multiple cryptographic techniques for privacy-preserving billing in local energy markets.

Findings

Achieves information-theoretic security for individual billing

Supports decentralized, privacy-preserving bill computation for thousands of users

Provides practical performance with bills computed in seconds to minutes

Abstract

We propose a privacy-preserving billing protocol for local energy markets (PBP-LEM) that takes into account market participants' energy volume deviations from their bids. PBP-LEM enables a group of market entities to jointly compute participants' bills in a decentralized and privacy-preserving manner without sacrificing correctness. It also mitigates risks on individuals' privacy arising from any potential internal collusion. We first propose an efficient and privacy-preserving individual billing scheme, achieving information-theoretic security, which serves as a building block. PBP-LEM utilizes this scheme, along with other techniques such as multiparty computation, inner product functional encryption and Pedersen commitments to ensure data confidentiality and accuracy. Additionally, we present three approaches, resulting in different levels of privacy protection and performance. We prove that the protocol meets its security and privacy requirements and is feasible for deployment in real LEMs: bills can be computed in less than five minutes for 4,000 users using the most computationally intensive approach, and in just 0.18 seconds using the least intensive one.