In the past decade, there has been a significant increase in distributed energy resources. This transformation has rendered the grid more bidirectional and transformed many small consumers into prosumers. However, these small power producers are not able to optimize their revenue since, currently, they can only sell to local energy suppliers or opt to sell at a fixed feed-in tariff. If intermediaries are eliminated from energy trading, both individual buyers and prosumers can increase their profitability. Blockchain technology could facilitate this scenario. In this paper, the simulated environment of a hierarchical energy trading market using Ethereum’s smart-contract technology is created as a proof-of-concept of using blockchain technology in energy trading. A dynamic grid fee based on electrical network loading is calculated to demonstrate an economic incentive for agents to have flexible load demand as well as to promote local resource utilization. The price volatility of cryptocurrency is addressed by designing a specific energy token for the model.
* All codes can be found at the following github repository link: