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Articles

A decentralized microgrid considering blockchain adoption and credit risk

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Pages 2116-2128 | Received 05 Dec 2019, Accepted 15 Jul 2021, Published online: 12 Aug 2021
 

Abstract

Blockchain and smart contract technology is advancing rapidly and, as many companies and industries are stepping up to adopt the technology, it is a worthy subject of research. This study presents a decentralized microgrid model that considers blockchain and smart contract technology. We consider a microgrid consisting of two players: a power distribution company (DC) and an electricity prosumer. The cost-benefit analysis of utilising blockchain and smart contract technology is assessed through an evaluation model for the two players. Further, to encourage the prosumer to generate renewable energy, a credit period that allows the prosumer to defer payments is provided by outside banks. A game-theoretical method is applied to analyse the decision-making by the two players, seeking to maximise their own profits. The DC acts as a leader who determines the electricity price and blockchain technology investment level, and the prosumer is a follower who determines how much renewable energy should be generated. The results show that the adoption of blockchain and smart contract technology benefits both the DC and prosumer in a decentralized microgrid. Further, several examples are provided to illustrate the model and obtain managerial insights.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This paper is supported in part by the Ministry of Science and Technology, Taiwan under grant MOST 110-2636-E-011-005.

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