Two-stage energy auction model and strategy among multiple microgrids for trading incentives and default management: Fid-Bau Portal

Two-stage energy auction model and strategy among multiple microgrids for trading incentives and default management

Jiang, Aihua / Wang, Haojie / Pan, Xiaowu

The lack of trust caused by rigid pricing strategies, third-party participation, and transaction default may lead to a decline in transaction willingness and misgivings about the availability of resources among microgrids (MGs). In particular, if large-scale transaction default occurs, it may endanger the safe and stable operation of the power grid. In this paper, a two-stage energy auction model based on blockchain and smart contracts to solve the problem of lack of trust and transaction default, and to increase flexibility in energy transactions among microgrids is proposed. The novelty of the proposed method lies in the transaction incentives and management of payment defaults through smart contracts and the partition management of buyer MGs' energy demands. Partitioning energy demands in the first stage of the auction can increase the diversity of sellers' bidding in the second stage. A credit management model based on the completion of historical transactions is designed to manage defaults. The priority factor affecting transaction order and energy allocation is designed to incentivize transactions. The introduction of blockchain can reduce dependence on trusted third parties and solve the security and privacy issues of transactions. Smart contracts are used to host the entire process of the auction and record, calculate the priority of each microgrid before the auction starts, and allocate energy fairly. In the energy delivery stage, the smart contract determines whether there is a default and automatically realizes the transfer of transaction funds, avoiding any selfish behavior in the transaction. Finally, we verify the effectiveness of the above-mentioned trading method through numerical analysis.