Electricity trading pricing among prosumers with game theory-based model in energy blockchain environment

• Published in: Applied energy Vol. 271; p. 115239
• Main Authors: Jiang, Yanni, Zhou, Kaile, Lu, Xinhui, Yang, Shanlin
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.08.2020
• Subjects: Electricity trading pricing; Energy blockchain; Game theory; Prosumer; Electricity trading pricing; Prosumer; Energy blockchain; Game theory
• ISSN: 0306-2619; 1872-9118
• DOI: 10.1016/j.apenergy.2020.115239

•A game-theory based pricing model in PBFT based-Consortium Blockchain is proposed.•Comparison with traditional centralized trading is presented.•Multi-leaders and multi-followers game is constructed and the existence of NE is identified.•A rule-based iterative pricing algorithm (RIP) is proposed to obtain the equilibrium prices.•Profit of sellers increases by 12.61% while the utility sacrifice of buyers decreases by 4.36%. As the application of blockchain expands from finance field to energy field, the concept of “energy blockchain” has been proposed. In energy blockchain environment, the peer-to-peer (P2P) electricity trading among prosumers is seen as one of the potential ways for supporting future electricity market development. Electricity trading pricing plays an important role in P2P electricity trading. However, existing studies rarely take interactions among prosumers into consideration while pricing. In this study, a game theory-based pricing model is proposed in a localized Practical Byzantine Fault Tolerance based-Consortium Blockchain (PBFT-CB). In the proposed model, both the interactions between seller and buyer and the interactions among sellers are considered. First, a bi-level model of sellers (on the upper level) and buyers (on the lower level) is formulated in Stackelberg game, and the existence of Nash equilibrium is identified. Then, a Rule-based Iterative Pricing (RIP) algorithm is proposed to get the equilibrium prices of non-cooperative static game. The effectiveness of RIP algorithm is validated through the case study. Specifically, profit of sellers increases by 12.61% while the utility sacrifice of buyers decreases by 4.36%. The comparisons in different scenarios show the effectiveness of the proposed model. This study suggests that P2P electricity trading provides benefits to prosumers and promote the development of electricity market, and it shows the great potential of energy blockchain.