Blockchain electricity trading using tokenised power delivery contracts. ESRI Working Paper No. 649 December 2019

Devine, Mel T. and Russo, Marianna and Cuffe, Paul (2019) Blockchain electricity trading using tokenised power delivery contracts. ESRI Working Paper No. 649 December 2019. [Working Paper]

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Abstract

This paper proposes a new mechanism for forward selling renewable electricity generation. In this transactive framework, a wind or solar farm may directly sell to consumers a claim on their future power output in the form of nonfungible blockchain tokens. Using the flexibility of smart contract code, which executes irrevocably on a blockchain, the realised generation levels will offset the token holders’ electricity consumption in near real-time. To elucidate the flexibility offered by such smart contracts, two ways of structuring these power delivery instruments are considered: firstly, an exotic tranched system, where more senior tokens holders enjoy priority claims on power, as compared against a simpler pro-rata scheme, where the realised output of a generator is equally apportioned between token holders. A notional market simulation is provided to explore whether, for instance, consumers could exploit the flatter power delivery profiles of more senior tranches to better schedule their responsive demands.

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