Abdullah Umar ¹ Sumit Kumar Jha ^2* Deepak Kumar ¹ Tirthadip Ghose ¹ Subhransu Ranjan Samantaray ²

• ¹ Birla Institute of Technology, Mesra, Ranchi, Jharkhand, India
• ² Indian Institute of Technology Bhubaneswar, Bhubaneswar, India

In isolated microgrids, distributed energy resources (DERs) such as small-scale generators, energy storage systems, and flexible loads operate independently from the main grid. The challenge is to optimize these resources to minimize user costs while ensuring microgrid stability and efficiency. This paper presents an optimization framework for DERs, leveraging a game-theoretical approach to demandside management (DSM) in an isolated microgrid environment. Each participant aims to minimize their total cost by strategically managing renewable energy generation, storage, and consumption. The framework models the DSM problem as a noncooperative game, identifying equilibrium points where no user can unilaterally reduce costs. The proximal decomposition algorithm is employed to iteratively update user strategies, ensuring convergence to a Nash equilibrium. Furthermore, a blockchain-based system with smart contracts is integrated to automate critical processes, including registration, event detection, DSM actions, and incentive distribution. This integration enhances transparency, security, and efficiency in the microgrid. During the registration phase, all devices are authenticated and authorized through a secure, transparent blockchain ledger. Event detection is managed by the microgrid Energy Management System (EMS), which continuously monitors voltage and frequency levels, triggering predefined smart contract responses to maintain stability. DSM actions are automatically executed by smart contracts, adjusting energy loads, generation, and storage to balance supply and demand dynamically. The smart contracts also manage the economic incentives that drive participant engagement. They calculate and distribute incentives based on predefined criteria, ensuring accurate and prompt allocation. This process is recorded on the blockchain, providing an immutable and auditable trail of actions and rewards. By leveraging blockchain technology and a game-theoretical approach, the proposed framework ensures continuous optimal operation despite fluctuations in energy demand and renewable generation. This dynamic and adaptive model promotes decentralized and efficient energy management within the microgrid, fostering a resilient and sustainable energy ecosystem.