Efficient Collaborative Energy Trading Between Smart Grids Using Blockchain and Smart Contracts

We consider a set of interconnected smart grids, where each grid supplies electricity to customers in its area. We develop a method of efficient collaborative energy trading, where the smart grids exchange electricity to meet the demands of their customers while minimizing the overall cost. Linear programming is used to determine the electricity transfers that minimize the overall cost. Machine learning is suggested to predict customer demands. A pricing model is also proposed. We also suggest how to detect and manage faulty behaviors, using an automatic mechanism of financial penalties and indemnities. The suggested energy trading method is enforced using a smart contract executed in blockchain. This ensures that electricity transfers, payments, penalties and indemnities comply with the rules and are recorded in blockchain in a secure, immutable, transparent and decentralized manner.