In this manuscript, we investigate the adoption of blockchain for over-the-counter (OTC) electricity wholesale trading under the EU regulatory framework. Our analysis of the core legislation reveals six potential issues: (1) data immutability-related error correction, (2) personal data protection and immutability, (3) access to different data layers, (4) obligation and capacity to report, (5) identification of counterparties and (6) conflict of interest. These six issues were used as basis for a survey with experts in this field from industry and academia. The majority of our respondents indicated four major points: (i) reduction of transaction costs is the main expected benefit, (ii) the application of blockchain can be compliant with the current regulatory framework, (iii) a sandbox is the most welcome regulatory approach to reduce legal uncertainty, and (iv) the first use case to be commercially implemented is expected to be a P2P platform, ahead of a use case focused on post-trade processes. We believe that the results presented in this manuscript might serve as guidance for market participants aiming to enable the development of blockchain.
With special emphasis being put upon renewable sources of energy day-by-day, there is a growing demand for this new technology to be integrated into the existing framework. To be widely accepted and made sustainable, such a technology should be profitable for all participating entities; giving them incentive enough to continue using it. What remains to be answered is the question of how that will be done. We break down the traditional power grid into smaller clusters, called microgrid and discuss its properties as potential candidates for implementing Blockchain powered energy trading mechanisms. Blockchain enabled technology is chosen as it brings with it, a degree of security, transparency and automation; and cuts out the established monopoly with the decentralized network and peer-to-peer trading. Two such working algorithms are reviewed for their implementation into the microgrid. One algorithm works on an auction model while another is a calculative data-dependent model but both the models function using smart contracts. Pre-existing projects in this field and their implementation around the world are reviewed by us in the later section of the paper. We conclude this paper by encapsulating the deployment considerations and limitations of employing Blockchain technology in a microgrid.
Zejia Jing, Manisa Pipattanasomporn, Saifur Rahman
Demand reduction, also known as Negawatts or negative watts, has emerged as another commodity that can be exchanged. This paper discusses conceptual architecture of a blockchain-based negawatt trading platform implemented on Hyperledger. Two trading scenarios are discussed. The first scenario involves negawatt trading between a demand response aggregator and buildings. The second scenario discusses negawatt trading among buildings to meet the contract shortfalls of buildings in the first scenario. Participants, assets, transactions and transaction flows of both scenarios are described, together with the smart contracts that describe how buyers and sellers are compensated for their negawatt exchange. Case studies are implemented and compared.
Blockchain technology has worked over the years and is being successfully applied in finance industry. The characteristics of decentralization, openness, immutability and security provide a natural solution to the distributed autonomy management for diverse energy sources and the transaction between a wide range of participants in the energy power industry. This paper introduces the current development status and the research on the application of blockchain technology in this industry in China from the aspects of demand response, point-to-point transaction and distributed energy resource. Existed problems and suggestions are concluded for the future studies.
One of the promising directions for finding solutions to the problems of regimes management and commercial electricity accounting in electric power systems is the application of distributed ledger technologies - Blockchain, which is due to increased availability of renewable energy sources. Currently, in the Russian Federation, the use of Blockchain technology is difficult for electric power systems operating in parallel with regional or unified power system due to the legislative restrictions imposed on operations in the retail and wholesale market for electrical energy. However, based on the distributed ledger technologies, the principles of the functioning of the electric energy market can be applied within the framework of small isolated electricity systems - microgrids. Mathematical modeling and calculation of the microgrid electric regimes were performed in the RastrWin3 program with the aim of accounting for losses in the electric power system. During the simulation it was obtained dependence of the power at the slack node from the number of load nodes for a different ratio of own generation to consumption in the node. In the case of positive power, there was a shortage of actual power in the system at the slack node, and in the case of a negative one, there was an excess of it. The use of distributed generation is economically justified in small isolated electricity system: the payback period of distributed generation devices is much less than their lifetime. It is possible to use Blockchain technology to organize mutual settlements between owners of small generation facilities in microgrid.
S. M. Suhail Hussain, Shaik Mullapathi Farooq, Taha Selim Ustun
Proliferation of Distributed Energy Resources (DER) changed power system operation drastically. They introduced generation at distribution level, which was unprecedented. Also, bidirectional power flow created more optimization opportunities such as Demand Side Management (DSM) and Vehicle-to-Grid (V2G) support. These schemes allow for efficient use of grid infrastructure, storage devices and DERs. In order to plan the operation and calculate bills, it is imperative to keep a record of these transactions. When some sort of trading occurs between multiple parties, trust is a major concern. Traditionally, a third part trusted by all keeps the record of transactions. Using blockchain technology for energy trading eliminates the role of trusted third party. This paper discusses the feasibility and benefits of implementing blockchain for smartgrids. It also develops an Ethereum-based implementation of blockchain technology for energy trading. Results are shown for a case where energy transactions are undertaken between Distribution System Operator (DSO) and smart meters of individual houses.
The peer-to-peer energy trading has been achieved among nodes in industrial Internet of Things. To establish a secure private market, some meaningful works propose the concept of the energy chain, where one block is added in a linear and chronological order once the trading pair of nodes (buyer and seller) has a valid transaction verified by data audit (e.g., a hash value). Since the buyer applies virtual coins from the credit bank to buy others' surplus energy, a considerable credit utility is obtained if all nodes are encouraged to meet local power loads out of self-interest. However, such frequent transactions have huge operational overhead, including a long chain maintaining many blocks and an expensive energy transportation cost between trading pairs. To solve these challenging issues, our method enables nodes to satisfy their power loads through local stored energy (self-sufficiency), before participating as sellers if they still have considerable surplus electricity. Without transactions made by some self-sufficient nodes, the operational overhead can be mitigated in a more secure environment. Taking the classic Internet of energy as a case study, we demonstrate the effectiveness of our solutions, and it can achieve a good tradeoff between credit utility and operational overhead.
With the rapid growth of renewable energy resources, energy trading has been shifting from the centralized manner to distributed manner. Blockchain, as a distributed public ledger technology, has been widely adopted in the design of new energy trading schemes. However, there are many challenging issues in blockchain-based energy trading, e.g., low efficiency, high transaction cost, and security and privacy issues. To tackle these challenges, many solutions have been proposed. In this survey, the blockchain-based energy trading in the electrical power system is thoroughly investigated. Firstly, the challenges in blockchain-based energy trading are identified and summarized. Then, the existing energy trading schemes are studied and classified into three categories based on their main focuses: energy transaction, consensus mechanism, and system optimization. Blockchain-based energy trading has been a popular research topic, new blockchain architectures, models and products are continually emerging to overcome the limitations of existing solutions, forming a virtuous circle. The internal combination of different blockchain types and the combination of blockchain with other technologies improve the blockchain-based energy trading system to better satisfy the practical requirements of modern power systems. However, there are still some problems to be solved, for example, the lack of regulatory system, environmental challenges and so on. In the future, we will strive for a better optimized structure and establish a comprehensive security assessment model for blockchain-based energy trading system.
Abstract Nowadays, people trade electricity through centralized companies or organizations which is vulnerable to cyber attacks and incapable of coping with increasing demands from stakeholders. In this paper, we propose a new Peer-to-Peer Electricity Blockchain Trading (P2PEBT) system based on the current charging and discharging schemes for electric vehicles (EV) in the smart grid to enable users to participate in the trading process. In order to cope with the current situation of the high volume of EV integration, the proof-of-Benefit (PoB) consensus primitives are proposed for P2PEBT to achieve demand response by providing incentives to balance local electricity demand in the novel blockchain system. PoB is implemented by executing the smart contracts on the Ethereum platform, and the process of achieving the maximal benefits is completed by submitting the transaction in the decentralized network. Security analysis shows that the P2PEBT system is able to manage a potential protection against up to a number of attacks. We demonstrate that the proposed system using the PoB consensus mechanism can achieve lower power fluctuation without requiring a third-party intermediary.
Asraful Alam, Mohammad Tausiful Islam, Arafa Ferdous
With the impetuous growth of modernization electricity demand is at its highest peak. So power market becomes a major issue in terms of trading symmetry and security. The traditional power market is unidirectional in nature, i.e. power plant supplies electricity to the customers which leads to centralization and monopoly. As the prosumers (producer and consumer) arises, microgrid becomes popular with its bidirectional energy supply configuration. Yet, there exist several challenges in energy demand management, trading and security. This paper proposes a blockchain-based approach to address those challenges with minimal effort. A double chained model of blockchain is proposed to facilitate trading among prosumers; algorithms are designed to deploy smart contracts and to form coalition and negotiate electricity trading; several techniques and scenarios are outlined to ease implementation.
Yuehao Zhao, Ke Peng, Bingyin Xu, Yuquan Liu · 6 authors
Blockchain is regarded as a revolutionary technology, which is widely used in different fields all over world, especially for the application in energy field. With the development of distributed generation, there’s a greater opportunity for distributed generation trading. In the near future, everyone may be able to sell their surplus electricity generated by their rooftop photovoltaic. It can be determined that blockchain can increase the trust between transactors. Blockchain can provide convenience for peer-to-peer (P2P) energy trading. In addition, blockchain can be used in other energy fields such as IOT, shared EV charging pile and etc. Because of the above advantages, many countries in the world are developing energy blockchain and have built some applied engineering programs. Some representative projects in US are introduced in this paper, and advanced technologies adopted in these existing projects are also analyzed. Finally, suggestions for developing energy blockchain technology and conclusions are given.
As a basic building block of the smart grid, advanced metering infrastructure (AMI) is substantial for gathering and sending consumption and production data of consumers. The applications facilitated by blockchain technology like local peer to peer (P2P) markets challenge the centrally organized utility industry with its disruptive potential and rely also heavily on AMIs as data source. However, such technologies pose a number of engineering challenges in early stage pilot projects: Unlike centrally managed AMIs, local P2P markets in particular require AMIs to exchange data with their peer devices, which increases the communication requirements due to the decentral nature of blockchain networks. In this paper, we compare the bandwidth requirement of real-time AMI with the requirements for a blockchain managed peer to peer market. By benchmarking both a normal operation and a high throughput scenario we find a ten times higher demand in bandwidth of the blockchain-based solution compared to real-time AMI and select the appropriate communication technology for an upcoming field test.
Manisa Pipattanasomporn, Saifur Rahman, Murat Kuzlu
Over the past decade, high penetration of rooftop solar photovoltaics (PV) has been observed in many countries. The availability of rooftop solar PV at customer premises has transformed a house into an energy prosumer that can both consume and export electricity. With proper regulations in place, homeowners can become a market participant who can buy and sell excess solar electricity in a peer-to-peer (P2P) trading environment. With the emerging blockchain technology, it will be possible to securely keep track of such solar electricity exchange without a third party oversight. The objective of this paper is to discuss the conceptual architecture of the blockchain-based platform for exchange of solar electricity in a neighborhood. Several open-source blockchain platforms are reviewed, including Hyperledger, Ethereum and Corda. Experiments developed on one of the well-known open-source blockchain platforms are discussed that describe how a P2P exchange of solar electricity can be set up in a laboratory environment.
With the advent of blockchain technology and the increasing penetration of rooftop photovoltaic (PV) systems, a new opportunity for energy trading through smart contracts has emerged. Challenges arise in such transactive markets to ensure individual rationality, incentive compatibility, budget balance, and economic efficiency during the auction process. This paper presents a comparative analysis of different smart contracts for solar electricity exchange in terms of market demand and supply metrics. Auction mechanisms considered in this paper are discriminatory and uniform k-Double Auction (k-DA). A simulation case study of 100 participants in a microgrid is presented using typical residential load and solar PV generation profiles. Results indicate that the discriminatory k-DA mechanism has the highest average percentage of contracts cleared and quantity traded during the period of excess solar energy generation, regardless of the level of PV penetration.
Integration of renewables and energy storage, leading to rise of prosumers, has created localized bidirectional flows. As the result, the utility demand has decreased and traditional centralized controller can no longer realize the optimal performance of ever growing distribution systems. To achieve scalable control, exploiting the potential of smart loads and Distributed Energy Resource (DER) controllability, a framework for decentralized Peer-To-Peer (P2P) energy management has been developed to manage localized micro-energy markets. Such decentralized management approach could, in theory, sustain diverse prosumer and utility business models. We have been developing an autonomous decentralized management solution that maximizes the benefit of prosumers while protecting utility assets. This P2P energy trading market leverages Blockchain technology and its Smart Contract framework. This paper presents 1) transactive energy market for P2P multi-settlement markets, 2) architecture of blockchain-based energy management system, 3) smart contract design that solves an economic dispatch problem of DERs to maximize the profit of pro/consumers.
This paper studies the design and management of distributed energy systems incorporating residential, commercial and industrial users. A hierarchical framework is first proposed for the energy demand side management through peer-to-peer exchange of information and energy in the real-time market. Smart contracts guaranteed by blockchain technologies are implemented to create a seamless and efficient trading system. The benefits of distributed energy management are presented such as economic savings, reduction of peak load and increased market efficiency facilitated by blockchain.
Distribution system operators (DSOs) are interested in demand side participation programs as an efficient and secure resource to manage electricity supply and demand. However, it is usually difficult for DSOs to aggregate demand response of large/small consumers. Thus, in some electricity markets, an entity called an aggregator is defined to aggregate the load response of consumers. In this paper a bilevel scheduling model is proposed to determine the long-term optimal contract price between the DSO and aggregator for executing direct load control in smart distribution systems. The DSO and aggregator are considered as two different agents with individual objectives in the proposed bilevel scheduling model. On the one hand, the aggregator maximizes its profit by bidding load reduction of the large consumers to the DSO by executing a direct load control (DLC) mechanism, and on the other hand, the DSO tries to minimize its overall cost to supply all consumers. The DSO has two options to follow the variation of its consumers' demand: purchasing energy from the electricity market and executing DLC programs. The bilevel programming formulation is transferred into an equivalent single level programming problem using its Karush-Kuhn-Tucker optimality conditions. Moreover, the uncertainties of the electricity market price, demand of consumers, and generation of a wind power plant are modeled via point estimate method. Two typical case studies are implemented to demonstrate the effectiveness of the proposed scheduling model.
This letter proposes a novel demurrage mechanism for blockchain electricity marketplaces, whereby the redemptive value of energy-backed tokens declines with time. This mechanism is intended to reward organic price-responsive load shifting by incentivising the consumption of electricity when it is locally abundant. To demonstrate how such a demurrage mechanism might function in practice, this letter describes a mixed complementarity model of a notional token marketplace. These market simulations indicate that, in equilibrium and with rational actors, the demurrage mechanism creates price signals that temporally align the production and consumption of electricity.
Shen Wang, Ahmad F. Taha, Jianhui Wang, Karla Kvaternik · 5 authors
The power grid is rapidly transforming, and while recent grid innovations increased the utilization of advanced control methods, the next-generation grid demands technologies that enable the integration of distributed energy resources (DERs)---and consumers that both seamlessly buy and sell electricity. This paper develops an optimization model and blockchain-based architecture to manage the operation of crowdsourced energy systems (CES), with peer-to-peer (P2P) energy trading transactions. An operational model of CESs in distribution networks is presented considering various types of energy trading transactions and crowdsourcees. Then, a two-phase operation algorithm is presented: Phase I focuses on the day-ahead scheduling of generation and controllable DERs, whereas Phase II is developed for hour-ahead or real-time operation of distribution networks. The developed approach supports seamless P2P energy trading between individual prosumers and/or the utility. The presented operational model can also be used to operate islanded microgrids. The CES framework and the operation algorithm are then prototyped through an efficient blockchain implementation, namely the IBM Hyperledger Fabric. This implementation allows the system operator to manage the network users to seamlessly trade energy. Case studies and prototype illustration are provided.
The work presented in this paper aims to propose a novel idea to use blockchain technology and IoT devices or solar devices that generate solar power for smart power distribution within the ecosystem for optimal and secured transactions for the demands of many smart cities. The blockchain 2.0 provides a consensus-based mechanism for programmable transactions. The paper presents a blockchain based power distribution ecosystem for smart cities by incorporating a wallet-based currency, called “Green Coin”, for power transactions of buying, selling and lending. It integrates negotiation model for monopoly avoidance and a transparent and fair system to every Power Service Provider (PSP) in the system.
The proliferation of electric vehicles and active distribution network has brought many uncertainties to the power system. If the power system involves battery-swap stations of electric vehicles, it is difficult to ensure the data security during the distributed scheduling. To solve the problem, this paper sets up a collaborative optimization model for distributed scheduling based on blockchain consensus mechanism, considering the battery-swap stations. The power system was divided into three levels: the transmission network level, the distribution network level and the battery-swap station level. Next, the objective functions were constructed to minimize the generation cost and daily load variance on each level, and the optimal scheduling plan for the power system was solved through multi-level collaborative optimization. The blockchain consensus mechanism was adopted to verify the accuracy of the transaction data, and the production data of all entities were encoded by hash function before storage, such that the data are tamper resistant and traceable. The example analysis shows that our model can effectively reduce the generation cost, lower the daily load variance, and enhance system stability. The research findings shed new light on maintaining the optimization efficiency and data confidentiality of modern power network.
This paper proposes a contract based mechanism to ensure the optimal management of a microgrid including smart buildings and local generation. The aim is to find a trade-off between the microgrid management system (MGMS) and the building energy management systems (BEMS) while preserving the building privacy. In this approach, the MGMS guaranties the prices of energy for buildings and the BEMS provides upward and downward flexibility proposals that can be activated by the MGMS. The exchanges between the two management systems are standardized and independent of the mechanism used by the BEMS to provide flexibility. The framework is implemented for electric heating buildings and an example is provided.
Mario Pichler, Marcus Meisel, Andrija Goranović, Kurt Leonhartsberger · 9 authors
This paper provides a snapshot of the globally ongoing decentralization of (business) relations in the energy sector. This tendency can be observed in other domains as well and is accompanied by new digital technological developments. Blockchain technology is assigned disruptive potential when it comes to realize those decentralization ideas. This hype about Blockchain is mainly company-driven without a solid academic basis yet. The authors are currently involved in several research efforts for utilizing distributed energy resources like photovoltaic systems, batteries and electric cars for the setup of energy communities and marketplaces. The paper, therefore, presents detailed investigations of background and motivations for decentralization and the building of (local) energy communities and (peer-to-peer) marketplaces for sustainable utilization of renewable energies. An overview of recent related Blockchain-based works is presented, and the current state and feasibility for the realization of the envisioned decentralized solutions are discussed. In this way, the work aimed at contributing to a research-based decision foundation for upcoming Blockchain-based decentralization efforts.