Blockchain-based transaction mechanism in virtual power plant: considering users’ privacy and reputation

Abstract

With the widespread adoption of distributed energy, the Virtual Power Plants (VPP) which is responsible for aggregating the flexible resources is becoming increasingly significant, especially in the electricity market. However, the traditional demand response (DR) trading mechanism in VPP faces issues such as data privacy leakage and unfair market profit distribution, which reduce users' trust and willingness to participate in market transactions. To address these issues, this paper proposes a new VPP’s trading mechanism that integrates blockchain and cryptographic technologies while considering users’ privacy protection and reputation values. Firstly, paillier homomorphic encryption (Paillier) and elliptic curve digital signature algorithms (ECDSA) are employed to protect data privacy, ensuring that the data of the VPP’s partispants remains secure. Secondly, a multi-party evaluation-based reputation mechanism is introduced, where multiple parties assess the users’ reputations, enhancing market clearing fairness and providing incentive-based responses. Finally, a blockchain-assisted data management solution was designed utilizing the immutability and distributed storage features of blockchain, effectively preventing malicious data tampering. Simulation results show that this trading mechanism not only improves transaction fairness and security but also enhances users’ participation enthusiasm.