Implementing Contract-for-Difference Arrangements for Hedging Electricity Price Risks of Renewable Generators on a Blockchain Marketplace

The dynamic nature of competitive electricity markets means that participants often resort to some form derivative financial instrument. One such instrument is a contract-for-difference (CFD), usually available renewable generators in certain enable them hedge their price risk. Embracing CFD presents new risks as counterparty credit, margining, third-party, legal, and process risks. Derivative instruments existing on blockchains have recently demonstrated potential suitable hedging tools for minimizing the generators. This article applies this concept first time risk by implementing novel decentralized finance instrument, an Ethereum blockchain marketplace governed smart contract mediate between stakeholders mutually enrolled bilateral arrangements. employed structure mitigates underlying traditional arrangements, underpinned suite autonomous mechanisms.