Blockchain Electricity Trading Under Demurrage
journal contributionposted on 17.01.2019, 14:41 by Paul CuffePaul Cuffe, Mel T. Devine
Letter in IEEE Transactions on Smart Grid
This letter proposes a novel demurrage mechanism for blockchain electricity marketplaces, whereby the redemptive value of energy-backed tokens declines with time. This mechanism is intended to reward organic price-responsive load shifting by incentivising the consumption of electricity when it is locally abundant. To demonstrate how such a demurrage mechanism might function in practice, this letter describes a mixed complementarity model of a notional token marketplace. These market simulations indicate that, in equilibrium and with rational actors, the demurrage mechanism creates price signals that temporally align the production and consumption of electricity.