Research on Blockchain Technology-based Electricity Retail Market
Management Model
Yan Li
1,a
, Yujia Li
1,b
, Yaheng Su
1,c
, Houjing Guo
1,d
, Xiao Meng
2,e
, Hankui Tian
2,f
and Yongli Wang
2,g
1
Inner Mongolia Electric Power Economic Technology Research Institute, China
2
North China Electric Power University, China
e f g
Keywords: Blockchain, Electricity Retail Market, Smart Contracts.
Abstract: In order to solve the supervision and accounting problems of electricity retail market, improve the operation
efficiency and reduce the transaction risk, the article proposes the architecture and business process of
electricity retail market management system based on the alliance chain. Firstly, it designs the operation and
management model of electricity retail market, establishes the retail market model based on the coalition
chain technology, and designs the retail package and transaction process; then it proposes the settlement
mechanism of electricity retail market transaction based on smart contract, designs the settlement process
and cost calculation method; on this basis, it constructs the framework of electricity retail transaction based
on the coalition chain technology by combining the characteristics of electricity retail market, and explains
how the overall architecture, technical It explains how blockchain technology can be applied to the
electricity retail market from three aspects: overall architecture, technical architecture, and functional
architecture.
1 INTRODUCTION
With the continuous promotion of the new round of
power reform, the electricity retail market will be
gradually liberalized (
National Development and
Reform Commission,
2020), the development scale of
the electricity retail market will be further expanded,
and the role of the market in the optimal allocation
of resources will be further highlighted. More and
more trading entities are involved in the market.
However, unlike the wholesale electricity market,
users in the retail electricity market tend to be more
dispersed and less capable of grasping information,
and electricity sales companies are prone to use the
asymmetric information generated in complex
electricity spot transactions to engage in unfair price
competition and harm the rights and interests of
other market players. Therefore, it is necessary that
there are still difficulties in regulation and
accounting in the early stage of the development of
the electricity retail market (
Tan, 2021). In order to
solve the information security problems of
traditional centralized trading architecture and
improve the transparency of market transactions, the
functional design and implementation method of
blockchain-based electricity market trading system
are proposed (
Ji, 2019, Yu, 2018).
2 BLOCKCHAIN TECHNOLOGY
ANALYSIS
2.1 Overview
In essence, blockchain is a distributed ledger with
decentralized characteristics. It supports multi-agent
participation, stores data in a block chain structure,
and uses cryptography technology to ensure the
security of data transmission and storage. It has the
technical characteristics of difficult tampering and
high security
(Ouyang, 2017). As shown in Figure 1,
the blockchain is composed of a series of blocks
arranged sequentially. Each block includes two
parts: block header and block body. The block
header includes information such as version number,
previous block hash, timestamp, difficulty target,
random value, and Merkle root. The block body, on
the other hand, stores transaction information in the
930
Li, Y., Li, Y., Su, Y., Guo, H., Meng, X., Tian, H. and Wang, Y.
Research on Blockchain Technology-based Electricity Retail Market Management Model.
DOI: 10.5220/0011359400003440
In Proceedings of the International Conference on Big Data Economy and Digital Management (BDEDM 2022), pages 930-935
ISBN: 978-989-758-593-7
Copyright
c
 2022 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved

Blockhead
Blockbody
Version number
Previous block HASH value
Timestamp
Difficulty Objectives
Nonce value
Merkle Root
Trading Information
Block
00000
Block
00001
Block
00002
Block
00003
Block Generation Cycle
Time
Block Information
Figure 1: Blockchain and block structure schematic.
form of a Merkle tree. In the block header, the
previous block hash ensures both that all blocks in
the blockchain are in order and that the blocks are
difficult to tamper with. The timestamp, on the other
hand, marks the time when the block was formed.
2.2 Blockchain Technology
Comparison and Selection
As shown in Table 1, there are significant
differences among the three types of blockchain in
terms of consensus process, node access, security
and efficiency.
Table 1: Comparative analysis of blockchain-like
technologies.
Type Public Chain Affiliate Chain
Private
Chain
Scope of
Consensus
All Nodes
Partially
selected nodes
Central
Node
Read
Permissions
Public
Public or
restricte
d
Public or
restricte
d
Security High High Low
Execution
efficienc
y
Low High High
Degree of
decentralization
Fully
decentralize
d
Partial
decentralization
Partially
centralize
d
2.3 Smart Contracts
Each trading node needs to agree on an electronic
contract when conducting transactions, including
information including signatures of both parties,
transaction content (electricity, tariff, etc.),
transaction rules, contract trigger conditions, etc.
The contract is proliferated through the P2P network
and written to the blockchain after being verified by
the consensus mechanism, and external data is
periodically detected and the contract is executed
once the trigger conditions are met. The transaction
mechanism of electricity retail trading is embedded
in a script in the form of a smart contract to verify
each process of electricity trading.
3 ELECTRICITY RETAIL
MARKET OPERATION AND
MANAGEMENT MODEL
3.1 Electricity Retail Market Model
The retail electricity market needs to operate in a
near "fully competitive" environment, where all
retail electricity consumers are free to choose their
electricity sales companies and grid companies no
longer have a monopoly over electricity consumers.
Within the limits set by the regulator, the company
can adjust its retail package to be more competitive
based on its ability to purchase electricity in the spot
market. To be truly effective, a transparent and
efficient electricity retail trading mechanism needs
to be established.
The model describes the sales path of electricity
as a commodity in the retail market with the main
line of electricity energy flow. In the model, market
players can improve their market competitiveness by
adjusting their trading behavior, trading channels
and other factors independently.
3.2 Electricity Retail Package
The electricity selling company develops and
publishes the electricity selling tariff standard called
electricity retail package, including the term,
electricity price mechanism, electricity deviation
handling mechanism, termination clause, and
applicable objects.
Research on Blockchain Technology-based Electricity Retail Market Management Model
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Table 2: Composition of electricity retail packages.
Package Composition Content
Period
Define the validity period of the
package
Electricity price
mechanism
Divided into fixed price, tiered
price, variable rate and hybrid
Power deviation
handling mechanism
Deviation assessment mechanism
can be defined at different
granularity such as monthly, daily
and time period
Termination clause
Agreement to cancel retail
contracts before expiration
Applicable objects
Conditions can be set to restrict
retail users, such as annual
electricity consumption, industry,
etc.
3.3 Electricity Retail Market Trading
Process
Market member registration and qualification audit.
Market members register according to the
requirements of the rules, and the trading center will
check the registration information with the
qualification information stored in the blockchain,
and then they can enter the electricity retail market
after passing the audit. Formulation and review of
retail packages. The electricity selling company
configures the electricity price mechanism, deviation
handling mechanism and cancellation clause
respectively according to the composition of the
package to form the complete package content,
sends it to the trading center for review, and after
passing it. Generation of retail contract. The retail
user views the retail package through the
blockchain, selects it according to his electricity
consumption characteristics, and sends a request to
the package corresponding to the electricity sales
company, and after the sales company confirms the
package request (
Gao, 2020).
4 DESIGN OF SETTLEMENT
MECHANISM FOR
ELECTRICITY RETAIL
MARKET TRANSACTIONS
BASED ON SMART
CONTRACTS
4.1 Settlement Process and Method
The market players involved in electricity retail
market settlement include electricity sales
companies, retail users and grid enterprises, and the
trading center and regulators supervise the
settlement process. Settlement is based on the smart
contract formed on the blockchain by the retail
contracts signed by retail users, which calculates the
electricity tariff and assessment fees of retail users
and forms the sales tariff and assessment revenue of
the power sales company. The smart contract signed
between the retail customer and the power sales
company specifies information such as price
formation mechanism, deviation handling
mechanism and termination clause. The grid
company broadcasts the actual electricity
consumption of the retail customer every hour,
which triggers the retail contract for settlement.
Settlement for the previous month is carried out at
the beginning of each month, including electricity
tariffs, deviation fees and default fees, and the
settlement information is recorded as a block in the
blockchain and in the full node.
4.2 Settlement Calculation
4.2.1 Calculation of Electricity Consumption
Tariff
1)The formula for calculating hourly electricity
charges for retail customers who choose fixed-price
and stepped-price packages is as follows:
Fee Time price Time quanti ty
FP Q=×
(1)
Current price
P
is the mutually agreed tariff in
yuan/kWh in the retail package
；
Time quantity
Q
is the
actual electricity consumption of retail customers, in
kWh.
2)The formula for calculating the hourly
electricity rate for retail customers who choose the
market rate type package is as follows.
Rate price Time quantityFee
PFkQ××=
(2)
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932

Rate price
P
is the hourly electricity consumption
side price in Yuan/kWh before the electricity spot
day or real-time market;
k
is the price adjustment
factor.
3)The formula for calculating the hourly
electricity rate for retail customers who choose the
hybrid package is as follows.
Time price Time quantity
Rate price
Fe
Time quant
e
ity
%
(1 %)
FP Q a
P
kQ a
=× ×+
×× × −
(3)
%a
is the proportion of fixed-price electricity
implemented in the hybrid package.
4.2.2 Deviation Assessment Cost Calculation
The deviation assessment processing mechanism is
divided into: no deviation assessment, deviation
assessment by daily period, and deviation
assessment by daily/monthly total electricity
consumption in the retail package.
1) Deviation assessment by daily time period.
The retail customer and the electricity sales
company agree on the proportion of over- and
under-use of electricity and the deviation tariff for
each of the 24 daily periods in the package.
2) Daily/monthly total electricity consumption
deviation assessment. The retail customer and the
electricity sales company agree on the proportion of
over- and under-use of daily or monthly total
electricity consumption and the deviation tariff in
the package.
4.2.3 Calculation of Liquidated Damages
Liquidated damages are composed of 2 parts in a
retail contract: the parties agree to cancel the
contract by amicable negotiation and the liquidated
damages force the termination of the contract. If
there is a termination by both parties, it will be
recorded in the blockchain and the contract will
expire at 24:00 on the last day of the month. At the
time of monthly settlement, the status of the
termination is checked and there is a forced
termination, then the liquidated damages are added
to the monthly settlement fee of the terminated
party, and the formula for calculating the liquidated
damages is as follows:
()
()
()
11
total
done 1 2
done
22
12
0,
%0,
0,
(0)
2
Cp C
M
pb pC C
M
Cp C
CC
p
≠≤


=×× ≠≤≤


≠≥


+

=

μ
μμ
μ
(4)
μ
is the default fee payable
；
done
p
is the cost of
the package for the executed month
；
b
is the
default factor
；
total
M
is the total number of months
of the package term
；
done
M
is the number of
months of the executed package term
；
1
C
,
2
C
is the
minimum and maximum amount of the default fee
stipulated by the regulator.
5 ELECTRICITY RETAIL
MARKET MANAGEMENT
SYSTEM DESIGN
5.1 Overall Architecture
The system is built with microservice architecture to
achieve state consensus and distributed storage of
data among market entities to ensure the validity,
integrity, security and non-tamperability of the
deposited information. The system architecture is
mainly composed of application layer, platform
layer and foundation layer. The application layer
includes front-end applications such as enterprise
market registration and approval, package
formulation and release, blockchain electronic
contract management, and power settlement basis
release. The platform layer demonstrates the main
services provided by the blockchain basic service
platform and provides effective service support for
the application layer. The foundation layer is mainly
composed of two parts: blockchain underlying
support system and data storage system.
5.2 Technical Architecture
The power retail market management system realizes
the node access mechanism of the alliance chain
through CA authentication and authorization. When a
new member is allowed to join the alliance, it needs
to send its public key and necessary identity
information to the certificate and visa authority, and
the CA authority will issue a certificate for it
according to this information. As a license
authentication for joining the alliance, CA
Research on Blockchain Technology-based Electricity Retail Market Management Model
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authentication can combine the advantages of
domestic algorithms of the State Password
Administration to improve the system's supervision
and credibility. The application architecture is shown
in Figure 2.
5.3 Functional Architecture
The front end of the system designs four functional
modules: retail market management system
information display, power sales company
management, retail user management and Trading
Center retail management. The functional modules
support the power sales companies, the power
purchase and sales agency business of retail users
and the market management of power trading center.
The system functional architecture is shown in
Figure 3.
Market Registra tion
Registration Application
Qualification Information
Depository
Blockchain
identity
verification,
bookkeeping
, smart
contracts
Package Release
Package
Development
Package
Certification
On-chain
publishing
Retail User Agent
Agent re lationship
selection
Package Selection
Proxy relationship
verification
Power Sales
Contracts
Identity
Verification
Contract
Signing
Contract
Verification
Contract
Depository
Market Settlement
On-chain power acquisition
Smart Contract Execution
Settlement Calculation
Result Release
Access Authorization Node Management
Smart ContractsDigital Encryption P2P networks
Consensus mechanism
Storage
Bookkeeping
Figure 2: Application Architecture.
Electricity Sales Company
Information Display
Package show
Retail Management System Information Display Module
Market Information
Display
Package Management
Marketing Channel
Proxy relationship
binding
Agent relationship
unbinding
Contract Changes
Retailer load forecasting
management
Company Load Forecast
Management
Deviation Management
Electricity consumption
management
Monthly Plan
Management
Settlement Management
Proxy relationship binding
Agent relationship unbinding
Contract Changes
Monthly Plan Management
Settlement Management
Retail User Management
Module
Power company management module
Trading Center Retail Management Module
Electricity sales company
package confirmation
Agency relationship
confirmation
Retail contra ct confirmation
Retail electricity consumption
management
Retail Settlement Calculation
Retail Settl eme nt Results
Release
Retail Contract Management
Retail Market Monitoring
Electricity
Ret ail Market
Operation
Management
System
Figure 3: System functional architecture.
BDEDM 2022 - The International Conference on Big Data Economy and Digital Management
934

6 CONCLUSION
This paper focuses on the application of blockchain
technology in electricity retail market management,
and proposes a decentralized retail market
management model based on smart contracts.
Through this management model, the on-chain
consensus of participants such as power trading
centers, grid enterprises, power sales enterprises,
retail customers, and supervisory agencies can be
realized. The application of blockchain in the field
of electricity retailing is worthy of in-depth study,
and the subsequent directions may include the
purchase of renewable energy power for retail users
and demand-side response of retail users based on
energy aggregation.
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