Consensus Mechanism for Peer-to-Peer Energy Trading

Abstract

The rapid growth of distributed energy systems requires a change from traditional centralized approach to a distributed one, for energy trading in peer-to-peer manner. The distributed ledger technology of blockchain can be used to build such peer-to-peer system without any third party involvement. It will provide to customers, a secure platform to participate in energy trading. The blockchain uses a mechanism to reach a certain point of consensus to distributively record transactions between peers. This paper discusses three types of consensus mechanism, viz. proof of work (PoW), proof of stake (PoS), and delegated Byzantine fault tolerance (DBFT). All these algorithms can be used in the peer-to-peer energy trading system. Based on type (permissioned or permission-less), fault tolerance, power consumption, and application considerations, we found that DBFT is most suitable consensus mechanism for the energy trading. The paper presents a novel implementation of DBFT-based peer to energy trading system and its comparison with all the other existing system. A case study based on DBFT is also presented to verify our hypothesis.