Blockchain-enabled distributed energy management in network-constrained microgrids

Abstract

With the increasing penetration of DERs and energy storage, microgrids are moving towards becoming decentralized networks with agents exhibiting inter-temporal constraints and constraints imposed by the network. Centralized models have limitations with regard to scaling and security as well as the need for trusted third parties. However, peer-to-peer trading requires systems that ensure the feasibility of the transactions. In this study, we propose a decentralized energy management system that combines consensus-based ADMM optimization with blockchain-enabled post-clearing settlement. Our model is based on multi-period social welfare maximization considering bilateral P2P transactions and battery storage dynamics. The centralized formulation is decomposed into a consensus-based ADMM scheme, where agents solve local convex subproblems and a non-economic coordinator enforces network feasibility through projection. The approach is validated primarily on a modified IEEE 14-bus system, with additional scalability verification on the IEEE 33-bus system, over a 24-hour horizon. For the IEEE 14-bus, results show that the distributed solution closely matches the centralized benchmark, achieving welfare values of 14.10 versus 14.11 in the unconstrained case and 13.97 in both cases under network constraints, corresponding to gaps of 0.05% and 0.02%, respectively. All line limits are satisfied in the constrained scenario. For the post-clearing stage of the IEEE 14-bus system, 2,808 bilateral trades are generated by the constrained marketclearing stage. Of these, 2,795 verified bilateral trades, corresponding to around 276 kWh of total energy, are settled using simulated smart meter measurements generated within the system and a blockchain-based settlement layer developed using Hardhat, recording a settlement success rate of 100% without involving the optimization process