Unpredictable environmental conditions make renewable energy
generators of a microgrid unreliable. Energy trade among microgrids may reduce dependency on utility grid (which uses traditional energy generator that
causes massive greenhouse gas emission). Coalition formation algorithms are
popular tools to execute energy trade among microgrids. In this paper we
develop coalition formation method using the blockchain mechanism. Advan-
tages of our solution over existing coalition formation algorithms for microgrid
energy trade are as follows:
(1) Distributed execution: We show how to find coalition structure in a dis-
tributed fashion. It improves robustness of the computation compared with
centralized executions of coalition formation algorithms. This is because
failure of a centralized computing entity will lead to the failure of energy
trade among all MGs but in a distributed solution such problem can be
(2) Asynchronous execution: In our solution, multiple coalition formation algo-
rithms are executed asynchronously. Most of the existing solutions execute
coalition formation algorithms at regular time intervals in synchronous
fashion. Our solution reduces the waiting time for a microgrid to trade
energy with other microgrids. Energy requirement of microgrids may de-
pend on weather and changes in their energy requirement may be not
synchronous, i.e., energy requirement of all microgrids may not change at
the same time and after regular intervals.
Scalable: We show that the distributed execution of coalition formation
algorithm is more scalable than centralized algorithms for coalition formation.
(3) Convergence: We show that the proposed distributed algorithm converges
(4) Local energy trade: We show that the proposed distribution algorithm pro-
motes local energy trade to reduce energy loss due to long transmission.
It should be noted that feasibility of local energy trade depends on satis-
faction of constraints in distribution network. Our solution aim to reduce
the distance between matched energy supplier and energy provider if the
distribution network allows such an energy transfer.
(5) Trust: The trust between a microgrid and the computation entity who
is responsible for generating coalition structure is ignored in the existing
solutions. We use a blockchain to eliminate such trust establishment re-
(6) Security and Privacy: The existing literature ignores the security of the
computation framework. A MG's energy surplus / deficit reveals its energy
consumption patterns and it may cause security problems. We mitigate
such security problems using the blockchain mechanism.