Optimizing Energy Trading with AI and Blockchain: A Game-Changer for the Energy Market
Ishan Kashyap
Ishan is a Full Stack Developer at Hygge Energy. He completed his Bachelor’s degree in Computer Engineering from the University of Alberta. He is deeply interested in the intersection of blockchain, machine learning, and artificial intelligence.
He is passionate about developing solutions that leverage these technologies to drive real-world impact, particularly in the areas of sustainability and net-zero initiatives. At Hygge Energy, he has contributed to projects that integrate blockchain for secure energy transactions and utilize AI-driven optimization strategies.
With a strong focus on innovation, Ishan is committed to building scalable and efficient digital solutions that support the transition towards a more sustainable and technologically advanced future.
A peer-to-peer (P2P) energy marketplace can transform how energy is traded. Homeowners with solar panels earn by selling surplus power directly to their neighbors, while EV owners can bid to charge their vehicles at the lowest possible price. The result is a dynamic marketplace driven by smart, cost-effective decisions made in real-time. Sounds like the future, right? In reality, today’s energy trading platforms face significant roadblocks. Fluctuating energy prices and the lack of decision-making tools leave buyers and sellers scratching their heads over the right bid price.
The result? Missed opportunities, frustration and inefficiencies.
At Hygge Energy, we’re changing the game by blending AI and blockchain to create a smarter, more transparent energy trading experience. Let’s dive into how we’re tackling these challenges with a powerful Bid Price Recommendation System designed to empower users and revolutionize energy trading.
The Problem: Confusion and Inefficiencies in Energy Trading
In P2P energy trading, pricing is often a guessing game. Sellers wonder if they are underselling their energy, while buyers hesitate, unsure if they are overpaying. The market’s dynamic nature—fluctuating demand, real-time supply changes, and external factors like weather—makes fair transactions tricky.
Without tools to predict optimal prices, users lack the confidence to participate fully, and trust in the platform takes a hit. This is not just a hypothetical scenario; studies show that trust, transparency and fair pricing mechanisms are key factors driving participation in P2P energy systems.
Fluctuating energy prices and the lack of decision-making tools leave buyers and sellers scratching their heads over the right bid price.
The Solution: AI-Powered Bid Price Recommendations
Enter our Bid Price Recommendation System, a blend of cutting-edge AI and blockchain technology designed to tackle these challenges head-on.
Here’s how it works:
1. Start Simple, Scale Smart: We’ve kicked things off with a linear regression model, trained on blockchain-stored historical transaction data. Why linear regression? Because it’s fast, interpretable, and gives users a clear understanding of how the system works. Users see the why behind the recommended prices, fostering trust from day one.
2. Data-Driven Accuracy: The model analyzes trends—like peak energy consumption times and how weather impacts pricing—to recommend optimal buy and sell bids. For example, if historical data shows that energy prices dip by 20% on sunny weekends, sellers can adjust their bids accordingly, and buyers know when to snag the best deals.
3. Evolving with Advanced AI Models: As our data grows, so does our ambition. We’re gearing up to deploy more advanced models, like Random Forests and XGBoost, to handle non-linear pricing patterns. These models will capture subtle market trends—like spikes in EV charging demand after a sports event—delivering recommendations with unparalleled accuracy.
4. Blockchain = Transparency: With all transaction data securely stored on the blockchain, every recommendation is backed by an immutable record. Users can verify the data themselves, building trust in the platform’s fairness.
The Impact: Smarter Trading, Happier Users
Our Bid Price Recommendation System isn’t just a tech upgrade—it’s a tool designed to empower users and revolutionize the marketplace. By providing clear, data-backed recommendations, the system builds confidence in every transaction, allowing buyers and sellers to trade with peace of mind, knowing they are making informed decisions. This clarity and trust boost user participation, encourage more active engagement, and contribute to the growth of the marketplace.
Studies show that platforms leveraging predictive tools can increase engagement and reduce churn by up to 30%, and we aim to replicate this success. Ultimately, our goal is to build a platform that inspires confidence, fosters trust, and delivers a smooth, rewarding energy trading experience for every user.
This clarity and trust boost user participation, encourage more active engagement, and contribute to the growth of the marketplace.
Why This Matters
By combining AI with blockchain, we are not just solving today’s problems, we are building a foundation for the future of energy trading. Our system grows smarter with every transaction, adapts to user feedback, and scales effortlessly to support broader adoption.
The potential for P2P energy trading is immense, with global recognition of its game-changing role in the energy sector. As highlighted by the International Renewable Energy Agency (IRENA), P2P electricity trading is emerging as a cornerstone of decentralized energy systems, empowering users to step into dual roles as both buyers and sellers.
With our innovative Bid Price Recommendation System, we aim to lead the charge in fostering trust, transparency, and efficiency in this evolving marketplace, paving the way for a more sustainable energy future.
The Future: A Smarter Energy Ecosystem
This is just the beginning. As we refine our models and onboard more users, the platform will become a dynamic hub of efficiency and trust. Whether you’re a seller looking to optimize profits or a buyer hunting for the best deals, our AI-powered solution ensures everyone wins.
