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A decentralized microgrid considering blockchain adoption and credit risk

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  • Yu-Chung Tsao
  • Thuy-Linh Vu

Abstract

Blockchain and smart contract technology is advancing rapidly and, as many companies and industries are stepping up to adopt the technology, it is a worthy subject of research. This study presents a decentralized microgrid model that considers blockchain and smart contract technology. We consider a microgrid consisting of two players: a power distribution company (DC) and an electricity prosumer. The cost-benefit analysis of utilising blockchain and smart contract technology is assessed through an evaluation model for the two players. Further, to encourage the prosumer to generate renewable energy, a credit period that allows the prosumer to defer payments is provided by outside banks. A game-theoretical method is applied to analyse the decision-making by the two players, seeking to maximise their own profits. The DC acts as a leader who determines the electricity price and blockchain technology investment level, and the prosumer is a follower who determines how much renewable energy should be generated. The results show that the adoption of blockchain and smart contract technology benefits both the DC and prosumer in a decentralized microgrid. Further, several examples are provided to illustrate the model and obtain managerial insights.

Suggested Citation

  • Yu-Chung Tsao & Thuy-Linh Vu, 2022. "A decentralized microgrid considering blockchain adoption and credit risk," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 73(9), pages 2116-2128, October.
    • Handle: RePEc:taf:tjorxx:v:73:y:2022:i:9:p:2116-2128
    DOI: 10.1080/01605682.2021.1960907
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    Cited by:

    1. Mousa Mohammed Khubrani & Shadab Alam, 2023. "Blockchain-Based Microgrid for Safe and Reliable Power Generation and Distribution: A Case Study of Saudi Arabia," Energies, MDPI, vol. 16(16), pages 1-34, August.
    2. Erdal Irmak & Ersan Kabalci & Yasin Kabalci, 2023. "Digital Transformation of Microgrids: A Review of Design, Operation, Optimization, and Cybersecurity," Energies, MDPI, vol. 16(12), pages 1-58, June.

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