  Smart grids are being increasingly deployed worldwide, as they constitute the
electricity grid of the future, providing bidirectional communication between
households. One of their main potential applications is the peer-to-peer (P2P)
energy trading market, which promises users better electricity prices and
higher incentives to produce renewable energy. However, most P2P markets
require users to submit energy bids/offers in advance, which cannot account for
unexpected surpluses of energy consumption/production. Moreover, the
fine-grained metering information used in calculating and settling
bills/rewards is inherently sensitive and must be protected in conformity with
existing privacy regulations.
  To address these issues, this report proposes a novel privacy-preserving
billing and settlements protocol, PPBSP, for use in local energy markets with
imperfect bid-offer fulfillment, which only uses homomorphically encrypted
versions of the half-hourly user consumption data. PPBSP also supports various
cost-sharing mechanisms among market participants, including two new and
improved methods of proportionally redistributing the cost of maintaining the
balance of the grid in a fair manner. An informal privacy analysis is
performed, highlighting the privacy-enhancing characteristics of the protocol,
which include metering data and bill confidentiality. PPBSP is also evaluated
in terms of computation cost and communication overhead, demonstrating its
efficiency and feasibility for markets with varying sizes.
