NRGcoin: Virtual currency for trading of renewable energy in smart grids

Abstract

In this paper we introduce a new decentralized digital currency, called NRGcoin. Prosumers in the smart grid trade locally produced renewable energy using NRGcoins, the value of which is determined on an open currency exchange market. Similar to Bitcoins, this currency offers numerous advantages over fiat currency, but unlike Bitcoins it is generated by injecting energy into the grid, rather than spending energy on computational power. In addition, we propose a novel trading paradigm for buying and selling green energy in the smart grid. Our mechanism achieves demand response by providing incentives to prosumers to balance their production and consumption out of their own self-interest. We study the advantages of our proposed currency over traditional money and environmental instruments, and explore its benefits for all parties in the smart grid.