Blockchain-enabled negotiation-based peer-to-peer energy trading: a dynamic pricing model for grid relief and consumer welfare

Abstract Peer-to-peer (P2P) energy trading offers a promising solution to enhance local renewable energy consumption, minimise reliance on market middlemen, and enable direct energy transactions between prosumers (producers and consumers) and consumers. But many blockchain-based P2P trading schemes only concentrate on automation of transactions and fail to consider distribution-network feasibility, negotiation fairness, blockchain gas cost, and cyber-economic security. This paper presents a blockchain-based network-constrained P2P energy trading model, which combines off-chain dynamic pricing, welfare-regularised bounded bilateral negotiation, oracle-attested distribution feeder feasibility, and on-chain commit-reveal escrow-based settlement. The market-clearing procedure is performed off-chain to alleviate the computational and blockchain gas costs, with the smart contract used for participant onboarding, bilateral trade commitment, oracle-backed settlement, cancellation, slashing, and immutable event recording. The physical feasibility validation is performed using a LinDistFlow-based oracle on a modified IEEE 33-bus radial distribution feeder, validated with an AC backward–forward-sweep power-flow solution. The proposed method is tested with several market conditions, including balanced, high demand, high supply, cloudy PV, evening-peak, and feeder-stress. Experimental findings demonstrate that the proposed welfare-regularised bounded negotiation approach delivers high social welfare and fairness and excludes physically infeasible P2P trades from the market clearing. For the balanced 24-hour test case, the proposed approach dispatches 629.94 kWh of P2P energy with a fairness index of 0.868, while removing voltage violations that occur with unconstrained trades. The LinDistFlow screening has a mean voltage error of about 0.0010 p.u. with AC validation. The scalability and blockchain cost analyses also demonstrate that off-chain negotiation, batch settlement, and commit-reveal protection enhance deployability. This paper showed that the design of secure P2P energy trading needs to consider both market negotiation and distribution-network constraints in addition to blockchain-based settlement rather than just smart-contract-based financial processes.