Smart contract formation enabling energy‐as‐a‐service in a virtual power plant

Abstract

Energy as a service (EaaS) is an emerging business model that enables the otherwise passive energy consumers to play an active role and participate in the energy utility services. This platform is formed through smart contracts registering peer-to-peer (P2P) transactions of energy through price and quantity. Many industries, including finance, have already leveraged smart contracts to introduce digital currencies. At this time, the utility industry is faced with the challenge of how to structure smart contract formation in a local energy market. Specifically, they are faced with the challenge of maintaining a balance between energy generation and demand while enabling traceability, security, and unbiased peer-to-peer energy transactions, especially within a virtual power plant. This article aims at addressing the aforementioned challenges. In particular, this article investigates how to structure the microgrids in a local energy market, and how to ensure balance and resiliency with incomplete information. Taking various generation asset dimensions and demand profiles into account, simulations are performed. A novel evolutionary computing strategy to structure the simulation is proposed. A comparison is made among random order, random selection, profit-based ranking, and evolutionary strategy for coordinating the contract formation. The discussions draw attention to each method's advantages and disadvantages in terms of their value as a strategy for forming smart contracts in a local energy market.