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Transforming marginal-cost pricing: A blockchain approach to fundamental energy system dynamics

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  • Delardas, Orestis

Abstract

Marginal-cost pricing (MCP) is widely employed in modern energy systems. The model was criticised during the 2022 energy crisis in Europe. Alternative market designs aim to overcome MCP limitations amid cheaper renewable energy and electricity costs. This paper identifies counterproposals that overlook MCP's rationale and outlines five fundamental principles for energy systems: demand-supply balancing, efficient resource allocation, reliability and security, transparency and fair competition, and affordability. Finally, it explores blockchain's potential to enable dynamic, decentralised energy markets by improving efficiency, enhancing grid reliability, increasing transparency, reducing manipulation, and providing flexibility for modern energy systems.

Suggested Citation

  • Delardas, Orestis, 2025. "Transforming marginal-cost pricing: A blockchain approach to fundamental energy system dynamics," Utilities Policy, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:juipol:v:95:y:2025:i:c:s0957178725000578
    DOI: 10.1016/j.jup.2025.101942
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