Blockchain and cooperative game theory for peer-to-peer energy trading in smart grids

Peer-to-peer energy trading allows smart grid-connected parties to trade renewable energy among each other. It is widely considered as a scheme to mitigate the supply-demand imbalances during peak-hour. However, the main challenge of such a scheme is the lack of secure, efficient, and transparent systems that foster economic incentives for users. This paper proposes a novel system that combines cooperative game theory and blockchain technology to stimulate users to maximize their profit and trade energy securely. In our model, users can store renewable energy credits as assets in the blockchain and trade them with others. We also develop a modified version of Proof of Energy Generation (PoEG) by including distribution line loss as a consensus mechanism among blockchain energy trading members. Then, we propose a coalition formation algorithm based on PoEG protocol and optimization technique to determine the winning coalition as block miners. The system is validated through comprehensive theoretical analysis and simulation experiments utilizing a standard IEEE 14-bus system and a real-life dataset (Ausgrid). Also, the developed model is implemented on the Avalanche blockchain platform. The test results show that the proposed scheme improves prosumers' financial benefits by 6.5% in terms of energy savings compared to the baseline model. The experiments demonstrate the effectiveness, capabilities, and robustness of the proposed system.