Carbon and Energy Trading Integration within a Blockchain-Powered Peer-to-Peer Framework

Abstract

In the ever-changing global energy landscape, the emergence of ‘prosumers’, individuals who both produce and consume energy, has blurred traditional boundaries. Driven by the growing demand for sustainability and renewable energy, prosumers play a critical role in bridging the gap between energy production and consumption. They can generate their own energy through decentralized sources like solar panels and wind turbines, and sell excess energy back to the grid. However, tracking carbon emissions and pricing strategies for prosumers pose challenges. To address this, we developed an innovative blockchain-driven peer-to-peer (P2P) trading platform for carbon allowances. This platform empowers prosumers to influence pricing and promotes a more equitable distribution of energy. The P2P platform leverages blockchain technology, a decentralized digital ledger, to provide transparency and security in carbon emission tracking and energy transactions. By eliminating intermediaries, blockchain ensures the accuracy of data and creates a tamper-proof record of energy production and consumption. This study employed a modified IEEE 37-bus test system to evaluate the efficacy of the proposed blockchain-based trading framework. The IEEE 37-bus system is a well-established benchmark for power system analysis, comprising 37 nodes, 13 generators, and 37 transmission lines. By leveraging this test system, this study demonstrated the framework’s ability to optimize energy consumption patterns and mitigate carbon emissions, highlighting the transformative potential of blockchain technology in the energy sector. The proposed P2P trading platform offers several benefits for prosumers: (1) Transparency: The blockchain-based platform provides a transparent record of all energy transactions, ensuring that prosumers are compensated fairly for the energy they produce. (2) Security: Blockchain technology makes it impossible to tamper with or counterfeit carbon allowances, ensuring the integrity of the trading system. (3) Efficiency: The P2P trading platform eliminates the need for intermediaries, reducing the cost and complexity of energy transactions. (4) Empowerment: The platform gives prosumers a greater say in how their energy is priced and distributed, promoting a more equitable energy system.