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Devising a trading mechanism with a joint price adjustment for local electricity markets using blockchain. Insights for policy makers

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  • Oprea, Simona-Vasilica
  • Bâra, Adela

Abstract

The new potential of Distributed Energy Resources (DER), residential consumers, buildings, and prosumers in terms of controllable devices, self-generation, and storage makes them more active in the market encouraged by lower electricity prices. In addition, integrating a higher volume of volatile Renewable Energy Sources (RES) that unstress the public grid by local trading interactions is a desirable target of Local Electricity Markets (LEM). In this paper, we propose a blockchain trading mechanism to simulate the electricity transactions for 11 modern smart houses with more than 300 appliances, 8 roof- or faced-PV systems, and smart-metered 15-min readings that form a small-size community. The electricity generated at the community level lowers the electricity bills and brings benefits for prosumers (sellers) and consumers (buyers). Several trading mechanisms for LEM transactions including auctions such as Uniform Price (UP), Pay-As-Bid (PAB), Generalized Second-Price (GSP), Vickrey-Clark-Groves (VCG) methods are implemented to evaluate the benefits and show their efficiency. After the market is initially cleared, an adjustment coefficient of the price is proposed for both sides (seller and buyer) to enlarge the trading potential at the community level using blockchain technology. It proves to bring excellent results to the LEM participants and enhance trading with outstanding benefits.

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  • Oprea, Simona-Vasilica & Bâra, Adela, 2021. "Devising a trading mechanism with a joint price adjustment for local electricity markets using blockchain. Insights for policy makers," Energy Policy, Elsevier, vol. 152(C).
    • Handle: RePEc:eee:enepol:v:152:y:2021:i:c:s0301421521001063
    DOI: 10.1016/j.enpol.2021.112237
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    References listed on IDEAS

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    1. Oprea, Simona-Vasilica & Bâra, Adela & Diaconita, Vlad, 2022. "A motivational local trading framework with 2-round auctioning and settlement rules embedded in smart contracts for a small citizen energy community," Renewable Energy, Elsevier, vol. 193(C), pages 225-239.
    2. Heilmann, Jakob & Wensaas, Marthe & Crespo del Granado, Pedro & Hashemipour, Naser, 2022. "Trading algorithms to represent the wholesale market of energy communities in Norway and England," Renewable Energy, Elsevier, vol. 200(C), pages 1426-1437.
    3. Bâra, Adela & Oprea, Simona-Vasilica, 2024. "Enabling coordination in energy communities: A Digital Twin model," Energy Policy, Elsevier, vol. 184(C).
    4. Pastore, Lorenzo Mario & Lo Basso, Gianluigi & Ricciardi, Guido & de Santoli, Livio, 2022. "Synergies between Power-to-Heat and Power-to-Gas in renewable energy communities," Renewable Energy, Elsevier, vol. 198(C), pages 1383-1397.
    5. Doumen, Sjoerd C. & Nguyen, Phuong & Kok, Koen, 2022. "Challenges for large-scale Local Electricity Market implementation reviewed from the stakeholder perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 165(C).
    6. Faia, Ricardo & Lezama, Fernando & Soares, João & Pinto, Tiago & Vale, Zita, 2024. "Local electricity markets: A review on benefits, barriers, current trends and future perspectives," Renewable and Sustainable Energy Reviews, Elsevier, vol. 190(PA).
    7. Lin, Boqiang & Chen, Jiaying & Wesseh, Presley K., 2022. "Peak-valley tariffs and solar prosumers: Why renewable energy policies should target local electricity markets," Energy Policy, Elsevier, vol. 165(C).
    8. Oprea, Simona-Vasilica & Bâra, Adela & Ciurea, Cristian-Eugen, 2022. "A novel cost-revenue allocation computation for the competitiveness of balancing responsible parties, including RES. Insights from the electricity market," Renewable Energy, Elsevier, vol. 199(C), pages 881-894.

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