Peer to Peer Energy Trade Among Microgrids Using Blockchain Based Distributed Coalition Formation Method

Unpredictable environmental conditions make renewable energy generators of a microgrid unreliable. Energy trade among microgrids may reduce dependency on utility grid (which uses traditional energy generator that causes massive greenhouse gas emission). Coalition formation algorithms are popular tools to execute energy trade among microgrids. In this paper we develop coalition formation method using the blockchain mechanism. Advantages of our solution over existing coalition formation algorithms for microgrid energy trade are as follows: Distributed execution: We show how to find coalition structure in a distributed fashion. It improves robustness of the computation compared with centralized executions of coalition formation algorithms. This is because failure of a centralized computing entity will lead to the failure of energy trade among all MGs but in a distributed solution such problem can be avoided.Asynchronous execution: In our solution, multiple coalition formation algorithms are executed asynchronously. Most of the existing solutions execute coalition formation algorithms at regular time intervals in synchronous fashion. Our solution reduces the waiting time for a microgrid to trade energy with other microgrids. Energy requirement of microgrids may depend on weather and changes in their energy requirement may be not synchronous, i.e., energy requirement of all microgrids may not change at the same time and after regular intervals.Scalable: We show that the distributed execution of coalition formation algorithm is more scalable than centralized algorithms for coalition formation.Convergence: We show that the proposed distributed algorithm converges quickly.Local energy trade: We show that the proposed distribution algorithm promotes local energy trade to reduce energy loss due to long transmission. It should be noted that feasibility of local energy trade depends on satisfaction of constraints in distribution network. Our solution aim to reduce the distance between matched energy supplier and energy provider if the distribution network allows such an energy transfer.Trust: The trust between a microgrid and the computation entity who is responsible for generating coalition structure is ignored in the existing solutions. We use a blockchain to eliminate such trust establishment requirement.Security and Privacy: The existing literature ignores the security of the computation framework. A MG’s energy surplus / deficit reveals its energy consumption patterns and it may cause security problems. We mitigate such security problems using the blockchain mechanism. © 2018, Springer Nature Singapore Pte Ltd.