Decentralized Energy Systems and Blockchain's Role in Sustainable Power Grids

Abstract

Decentalized energy systems are a radical departure from the way we have traditionally produced, distributed and consumed electricity – relying upon centralized grids that depend on fossil fuels towards more sustainable, resilient and community-based models. These systems improve grid flexibility, save transmission costs and are fit for renewable power input like solar or wind, since prosumers can generate and distribute energy within the local area. Blockchain technology is going to be a key enabler of this transition, as it offers a reliable, transparent and decentralized platform for energy sharing and grid management. The blockchain technology utilizing the smart contracts and mutual system can provide reliable peer-to-peer power trading, accurate settlement, and less necessity of centralized agency. Its distributed ledger makes the equipment trustable for all participants, and meanwhile it realizes real-time transaction data sharing to optimize grid management like demand response of electricity and certificates tracing of green power production.