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Energy Trading on a Peer-to-Peer Basis between Virtual Power Plants Using Decentralized Finance Instruments

Author

Listed:
  • Serkan Seven

    (Department of Software Engineering, Abdullah Gul University, Kayseri 38080, Turkey)

  • Yeliz Yoldas

    (Department of Software Engineering, Kayseri University, Kayseri 38080, Turkey)

  • Ahmet Soran

    (TRK Technology R&D, Ankara 06800, Turkey)

  • Gulay Yalcin Alkan

    (Department of Computer Engineering, Abdullah Gul University, Kayseri 38080, Turkey)

  • Jaesung Jung

    (Department of Energy Systems Research, Ajou University, Suwon 16499, Korea)

  • Taha Selim Ustun

    (Fukushima Renewable Energy Institute, AIST (FREA), Koriyama 963-0298, Japan)

  • Ahmet Onen

    (Department of Electrical-Electronic Engineering, Abdullah Gül University, Kayseri 38080, Turkey
    Department of Electrical and Computer Engineering, College of Engineering, Sultan Qaboos University, Al-Khoud, Muscat 123, Oman)

Abstract

Over time, distribution systems have begun to include increased distributed energy resources (DERs) due to the advancement of auxiliary power electronics, information and communication technologies (ICT), and cost reductions. Electric vehicles (EVs) will undoubtedly join the energy community alongside DERs, and energy transfers from vehicles to grids and vice versa will become more extensive in the future. Virtual power plants (VPPs) will also play a key role in integrating these systems and participating in wholesale markets. Energy trading on a peer-to-peer (P2P) basis is a promising business model for transactive energy that aids in balancing local supply and demand. Moreover, a market scheme between VPPs can help DER owners make more profit while reducing renewable energy waste. For this purpose, an inter-VPP P2P trading scheme is proposed. The scheme utilizes cutting-edge technologies of the Avalanche blockchain platform, developed from scratch with decentralized finance (DeFi), decentralized applications (DApps), and Web3 workflows in mind. Avalanche is more scalable and has faster transaction finality than its layer-1 predecessors. It provides interoperability abilities among other common blockchain networks, facilitating inter-VPP P2P trading between different blockchain-based VPPs. The merits of DeFi contribute significantly to the workflow in this type of energy trading scenario, as the price mechanism can be determined using open market-like instruments. A detailed case study was used to examine the effectiveness of the proposed scheme and flow, and important conclusions were drawn.

Suggested Citation

  • Serkan Seven & Yeliz Yoldas & Ahmet Soran & Gulay Yalcin Alkan & Jaesung Jung & Taha Selim Ustun & Ahmet Onen, 2022. "Energy Trading on a Peer-to-Peer Basis between Virtual Power Plants Using Decentralized Finance Instruments," Sustainability, MDPI, vol. 14(20), pages 1-16, October.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:20:p:13286-:d:943694
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    References listed on IDEAS

    as
    1. Gourisetti, Sri Nikhil Gupta & Sebastian-Cardenas, D. Jonathan & Bhattarai, Bishnu & Wang, Peng & Widergren, Steve & Borkum, Mark & Randall, Alysha, 2021. "Blockchain smart contract reference framework and program logic architecture for transactive energy systems," Applied Energy, Elsevier, vol. 304(C).
    2. Yue Wu & Junxiang Li & Jin Gao, 2021. "Real-Time Bidding Model of Cryptocurrency Energy Trading Platform," Energies, MDPI, vol. 14(21), pages 1-14, November.
    3. William Metcalfe, 2020. "Ethereum, Smart Contracts, DApps," Economics, Law, and Institutions in Asia Pacific, in: Makoto Yano & Chris Dai & Kenichi Masuda & Yoshio Kishimoto (ed.), Blockchain and Crypto Currency, chapter 0, pages 77-93, Springer.
    4. Bianca Goia & Tudor Cioara & Ionut Anghel, 2022. "Virtual Power Plant Optimization in Smart Grids: A Narrative Review," Future Internet, MDPI, vol. 14(5), pages 1-22, April.
    Full references (including those not matched with items on IDEAS)

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