NRG-X-Change - A Novel Mechanism for Trading of Renewable Energy in Smart Grids

In this position paper we propose a novel trading paradigm for buying and selling locally produced energy in the smart grid. Unlike recently proposed techniques that rely on predictions and a day-ahead market, here prosumers are billed by the distribute system operator according to their actual usage and rewarded based on their actual energy input, similar to the current state of affairs. Our mechanism achieves demand response by providing incentives to prosumers to balance their production and consumption out of their own self-interest. All rewards and payments are carried out using NRGcoin — a new decentralized digital currency similar to Bitcoin, that we introduce in this paper. Prosumers exchange NRGcoins with fiat currency on an exchange market for profit, or for paying their energy bills. We study the advantages of our proposed currency over traditional monetary payment and explore its benefits for all parties in the smart grid.