Empowering Sustainable Communities Through Decentralized Energy Trading [poster]

The transition to renewable energy is crucial to achieving global climate targets and ensuring affordable, sustainable energy for communities [1].

Peer-to-peer (P2P) energy trading empowers individuals to produce, consume, and trade energy directly without intermediaries. It enables lower costs, encourage the use of distributed energy resources (DERs) and increases grid reliability. According to a study conducted on the first real-world P2P market, participants became more motivated to invest in distributed energy resources such as photovoltaic systems [2].

Although you might sell energy to your neighbor, the financial flow in traditional P2P energy markets is still controlled by grid operators. This work aims to address that limitation by leveraging blockchain technology to decentralize the financial flow, ensuring that transactions are trustless, transparent, and independent of centralized entities.

In a uniform bidding market, also referred to as a single price auction, the winning bidders pay or receive the same market-clearing price. This price is established at the point where supply and demand are equal within the marketplace, as illustrated in Fig.2. Because all participants are treated equally and no advantages may result from bidding tactics or market timing, such a market design simplifies the transaction process and fosters fairness [5].

Blockchain technology offers an ideal framework for decentralized peer-to-peer energy markets by enabling trustless, transparent, and secure transactions without the need for intermediaries [3]. Its immutable ledger ensures all energy trades are recorded accurately and transparently, fostering trust among participants. By decentralizing market operations, blockchain eliminates reliance on central authorities, empowering prosumers and consumers to interact directly.

Arbitrum Orbit, an advanced Layer 3 (L3) blockchain solution, is central to this innovation. It provides scalability, low-cost transactions, and a secure decentralized ecosystem for energy trading, surpassing the limitations for cheap transactions and scalability of traditional Layer 1 and 2 architectures.