Blockchain-Enabled Renewable Energy Certificate Trading: A Secure and Privacy-Preserving Approach

TL;DR

This paper addresses the challenges of global Renewable Energy Certificate (REC) trading by proposing a DAG-based blockchain platform that preserves participant privacy. It combines a reputation-weighted Fast Probability Consensus (FPC) with privacy-preserving abstractions to accelerate transaction validation and reduce energy use relative to PoW/PoS. The authors formalize supplier, consumer, and trading models, and design a three-layer system (data, network, consensus) with off-chain data and on-chain records, DID identities, and proxy accounts for privacy. Using real-world PJM data, they show improved performance and discuss policy implications for broader adoption of secure, private REC markets.

Abstract

In the 21st century, transitioning to renewable energy sources is imperative, with fossil fuel reserves depleting rapidly and recognizing critical environmental issues such as climate change, air pollution, water pollution, and habitat destruction. Embracing renewable energy is not only an environmental necessity but also a strategic move with multiple benefits. By shifting to renewable energy sources and supporting their production through the acquisition of renewable energy certificates, we foster innovation and drive economic growth in the renewable energy sector. This, in turn, reduces greenhouse gas emissions, aligning with global efforts to mitigate climate change. Additionally, renewable energy certificates ensure compliance with regulations that mandate the use of renewable energy, enhancing legal adherence while promoting transparency and trust in energy sourcing. To monitor the uptake of renewable energy, governments have implemented Renewable Energy Certificates (RECs) as a tracking mechanism for the production and consumption of renewable energy. However, there are two main challenges to the existing REC schema: 1) The RECs have not been globally adopted due to inconsistent design; 2) The consumer privacy has not been well incorporated in the design of blockchain. In this study, we investigate the trading of RECs between suppliers and consumers using the directed acyclic graph (DAG) blockchain system and introduce a trading schema to help protect consumer information. Our results demonstrate lower transaction time by 41\% and energy consumption by 65\% compared to proof-of-stake.

Figures (7)

• Figure 1: Renewable energy certificate trading system.
• Figure 2: DAG-based blockchain
• Figure 3: Renewable energy generation from PJM dataset
• Figure 4: Market tradings of REC between 15 commercial building consumers consumers in one year
• Figure 5: Trading distributions between (a) without generating proxy transaction accounts and (b) with generating proxy transaction accounts. When the transaction process does not generate a distribution of transactions for proxy accounts, each account is mapped to each consumer. A total of 15 consumers' trading quantities are recorded on the platform, and it can be guessed that the user is a important commercial building consumer. For example, account 4 was likely to be a commercial user due to the highest transaction quality. However, the figure below shows the privacy-preserving pattern by generating proxy transaction accounts during the transaction. The total number of accounts traded was the original 15 accounts plus the proxy accounts, and the total number of accounts was 40.