Peer-to-peer (P2P) energy markets enable local exchange of electricity and Renewable Energy Certificates (RECs), fostering decentralized and transparent renewable integration. However, frequent trading of RECs on public blockchains faces challenges such as high gas costs, limited scalability, and potential privacy concerns. This paper presents a decentralized auction protocol developed within the European iDreco project, which aims to promote fair and efficient REC markets in local energy communities. The proposed system adopts a hybrid architecture: on-chain smart contracts ensure identity verification, transparency, and settlement, while an off-chain engine performs auction matching to reduce latency and gas consumption. We describe the protocol’s structure, including modular smart contracts and a double auction algorithm supporting optional secondary rounds. A preliminary evaluation confirms that hybrid architectures like iDreco improve cost-efficiency, scalability, and auditability in energy certificate trading.

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Decentralized Hybrid Auction Protocol for Renewable Energy Communities: An Analysis of the iDreco Auction Protocol

  • Carlos Àlvarez López,
  • Diego Valdeolmillos-Villaverde,
  • Mario González Morán,
  • Javier Prieto,
  • Sara Rodríguez González

摘要

Peer-to-peer (P2P) energy markets enable local exchange of electricity and Renewable Energy Certificates (RECs), fostering decentralized and transparent renewable integration. However, frequent trading of RECs on public blockchains faces challenges such as high gas costs, limited scalability, and potential privacy concerns. This paper presents a decentralized auction protocol developed within the European iDreco project, which aims to promote fair and efficient REC markets in local energy communities. The proposed system adopts a hybrid architecture: on-chain smart contracts ensure identity verification, transparency, and settlement, while an off-chain engine performs auction matching to reduce latency and gas consumption. We describe the protocol’s structure, including modular smart contracts and a double auction algorithm supporting optional secondary rounds. A preliminary evaluation confirms that hybrid architectures like iDreco improve cost-efficiency, scalability, and auditability in energy certificate trading.