Blockchain-enhanced optimization for a secure and transparent global energy supply chain with reduced environmental impact and cost
Abstract
The rapid evolution of energy systems necessitates innovative solutions to ensure efficient, transparent, and secure energy distribution. This paper introduces a novel blockchain-based model for decentralized energy trading, aiming to optimize the global energy supply chain. The proposed model leverages smart contracts for automated peer-to-peer transactions, allowing for a significant reduction in intermediary costs and enhancing the robustness of the energy market. Through comprehensive data analysis of historical energy production figures, we establish baseline supply curves for various energy sources including coal, natural gas, nuclear, hydro, wind, solar, biofuels, and waste, from 1990 to 2021. We present a mathematical framework that encapsulates supply and demand dynamics, price adjustment mechanisms, and tokenization of energy units. The equilibrium model ensures market clearance, while the pricing algorithm dynamically responds to real-time supply and demand fluctuations. Moreover, the study formulates an optimization objective focused on maximizing social welfare, encompassing consumer and producer surplus, and minimizing environmental impacts. The model is flexible, capable of integrating future advancements in renewable energy and storage technologies. Our findings indicate that blockchain technology not only has the potential to revolutionize the way we trade energy but also to significantly contribute to a more sustainable and environmentally friendly energy landscape.