Blockchain-Based Smart Grids

Miadreza Shafie-khah

• Publisher: Academic Press
• Year: 2020
• ISBN:
  9780128178638
• Topic: Tecnología e ingeniería
• Subtopic: Recursos de energía renovable

Blockchain-Based Smart Grids presents emerging applications of blockchain in electrical system and looks to future developments in the use of blockchain technology in the energy market. Rapid growth of renewable energy resources in power systems and significant developments in the telecommunication systems has resulted in new market designs being employed to cover unpredictable and distributed generation of electricity. This book considers the marriage of blockchain and grid modernization, and discusses the transaction shifts in smart grids, from centralized to peer-to-peer structures. In addition, it addresses the effective application of these structures to speed up processes, resulting in more flexible electricity systems.

Aimed at moving towards blockchain-based smart grids with renewable applications, this book is useful to researchers and practitioners in all sectors of smart grids, including renewable energy providers, manufacturers and professionals involved in electricity generation from renewable sources, grid modernization and smart grid applications.

• Considers the current challenges facing smart grids and presents solutions on how blockchain technology could counter these issues
• Incorporates detailed applications of blockchain in smart grids based on dynamic research and developments
• Includes models, algorithms, and frameworks to practically demonstrate the uses of blockchain technology
• Written by a global group of authors for worldwide coverage

Chapter 1

Introductory chapter: An overview of the book

Miadreza Shafie-khah    School of Technology and Innovations, University of Vaasa, Vaasa, Finland

Abstract

These days the advances in communication technologies, IoT, and intelligent smart meters lead the conventional unilateral power grids into intelligent bilateral ones. In newly emerging smart electric grids, distributed renewable resources and demand can play a proactive role, changing the structure of the system from the centralized unilateral scheme to the smart bilateral networks. In a smart grid environment, the data from smart meters have the capability to be transmitted in less than a second, leading to better management of the consumption. Nevertheless, the newly intelligent grids give birth to some challenges. What would be the best platform in which different parties can easily trade energy with each other? How can the grid be immunized against cyberattack and personal information leakage? Promoting trust between participants is another issue coming with the advent of the smart grids. Management of small participants, such as small customers or prosumers, should be managed through a third-party entity like an aggregator. However, the aggregator itself can incur costs for small customers. Blockchain technology could be an efficient solution to address the aforementioned smart grids’ problems.

Keywords

Blockchain; Security; Demand response; Smart grid; Protection; Microgrid; Privacy; Business model; Electricity market; Electric vehicle

These days the advances in communication technologies, IoT, and intelligent smart meters lead the conventional unilateral power grids into intelligent bilateral ones. In newly emerging smart electric grids, distributed renewable resources and demand can play a proactive role, changing the structure of the system from the centralized unilateral scheme to the smart bilateral networks. In conventional grids, power was only transferred from supply side to the consumers that are considered as submissive ratepayers. In a smart grid environment, however, all parties in the system, ranging from customers to the bulk-generating units, can experience real-time communication with each other through state-of-the-art technology. The data from smart meters have the capability to be transmitted in less than a second, leading to better management of the consumption.

Nevertheless, the newly intelligent grids give birth to some challenges, for instance, the possibility of transferring the huge amount of grid data while maintaining the system security at a predefined level. What would be the best platform in which different parties can easily trade energy with each other? How can the grid be immunized against cyberattack and personal information leakage? Promoting trust between participants is another issue coming with the advent of the smart grids. Management of small participants, such as small customers or prosumers, should be managed through a third-party entity like an aggregator. However, the aggregator itself can incur costs for small customers. Furthermore, they may not be reluctant to share their personal information with the other entity.

Blockchain technology could be an efficient solution to address the aforementioned smart grids’ problems. The blockchain-based platform consists mostly of a distributed ledger, a decentralized consensus mechanism, and cryptographic security measures. All parties would be able to directly share information and hold the copies of transaction records via their blockchain accounts. Transactions should be performed and confirmed through a set of rules named smart contracts. The privacy of information will be highly preserved using hash functions in the blockchain system. Following the advantages of the blockchain-based platform, the main aim of this book is to introduce various applications of blockchain technology in smart grids as presented in Fig. 1. The book chapters are introduced briefly as follows.

Fig. 1 Applications of blockchain technology in smart grids.

Chapter 2, a panorama of applications of blockchain technology to energy, presents the potential applications of blockchain technology in five energy subsectors. The first subsector is energy trading that would be facilitated utilizing blockchain technology. Payments for various sectors can be fully automated through the use of smart contracts, one of the important features of blockchain technology. The second impact of blockchain will be assessed on environmental attribute management including some products such as renewable energy credits, provenance certificates, and guarantees of origin. The use of blockchain technology in energy sectors can incentivize to invest in clean energies as it can solve some challenges related to the current markets. Demand response will be considered as the other application of blockchain technology in energy sectors that will be presented in this chapter. This technology can assist to automate demand response program in a secure way while considering the preferences of customers. The role of blockchain technology in electric mobility will be also discussed in the second chapter. The most effects of this new technology would be on scheduling related to charging and discharging of electric vehicles in the most efficient way. The last energy subsector presented in Chapter 2 is the financing sector. It states that blockchain technology could improve the liquidity of the capital of various projects through the tokenization of assets. Finally, Chapter 2 concludes by introducing 150 companies employing blockchain technology in the field of energy.

Chapter 3, entitled transition toward electricity trading markets blockchain-based, discusses the application of blockchain technology, specifically in electricity markets. It investigates events of the past 10 years, leading to the fourth industrial revolution and the utilization of the decentralized trading platform to incentivize small customers. Blockchain technology will be presented in the chapter so as to satisfy the prosumers’ desire for citizen-run democratic energy systems. Afterward the development of the applications of blockchain is discussed. The third chapter continues with future research and milestones with the aforementioned newly emerged technology.

Chapter 4, decentralized operation of interdependent power and energy networks, blockchain and security, describes the transition of conventional networks toward smart grids known as efficient, reliable, secure, and sustainable power grids. Then, blockchain will be discussed to expedite the transition toward decentralization by eliminating the role of an intermediary. The previous literature related to the utilization of blockchain in smart grids is summarized in the fourth chapter. Finally, different frameworks are explained to implement decentralization taking into account the security of participants.

Chapter 5 deals with the application of blockchain technology in different business models related to energy markets. In addition, the roles of various parties in each business model will be analyzed. The business models consist of peer-to-peer, flexibility, over the counter, and crowdsale trading platform. The chapter first represents different parties who are able to take part in the market. Then the interaction between them is assessed. Further, it explains how the blockchain trading platform can speed up the trading while building a reliable platform for different kinds of markets.

Chapter 6, blockchain and its application fields in both power economy and demand-side management, starts with the potential application of blockchain technology in power economy. Besides, it states that demand-side management can also deploy blockchain as a platform to control the consumers’ consumption. The architecture, opportunity, and drawbacks of blockchain are fully assessed in the sixth chapter taking into account different viewpoints.

Chapter 7, blockchain-based demand response using prosumers scheduling, represents a two-stage model employing blockchain so as to design a price-based demand response program. The proposed model is considered as a decentralized security-based model in which prosumers do not need to share their private information with any aggregator acting as a broker. In addition, the proposed model is mainly from the viewpoint of prosumers, that is, consumers who are also equipped with renewables to produce energy and manage their consumption. The proposed steps are implemented through a blockchain-based platform to automate the market mechanism. This mechanism aims to motivate prosumers to react to market prices while preserving the prosumers’ privacy.

In Chapter 8, energy flexibility is proposed to trade in a secure, reliable, and transparent way in a microgrid environment by employing blockchain technology. In the proposed technique the power presumption data are captured utilizing a blockchain-based distributed ledger technology. The data are gathered from the smart meters, and the smart contracts will recognize programmatically the anticipated energy flexibility of each prosumer, the associated benefits or penalties, and the regulations needed for balancing energy demand regarding grid-level energy production. The blockchain-based consensus mechanism is used to settle the related market and validate the demand response program. The results extracted from several structures of literature show that the blockchain-based distributed demand-side management can match demand and supply efficiently, while the demand response indicator will be tracked with high precision.

The blockchain-based coordination of electric vehicle charging stations is explained in Chapter 9, blockchain for decentralized optimization of energy sources in electric vehicle charging coordination via blockchain-based charging power quota trading. The chapter proposes a two-stage scheme in which the charging quotas are initially allocated to the charging stations. Then, charging stations would be able to trade with each other taking into consideration the demand elasticity of the stations. All the trading and settlements are proposed to be performed in a blockchain-based platform so as to promote trust and benefit from the transparency of this new technology. The effectiveness of the method will be proved in the simulation section of this chapter.

Chapter 10, islanded microgrid management based on blockchain communication, explains the management of a microgrid that will be enabled by the blockchain-based platform. A multiagent market framework is proposed in which the payments between entities will be carried out automatically through blockchain technology. The microgrid is taken to trade with the upstream grid, providing that the generation and demand are not exactly equal.

Another application of blockchain technology in power systems is introduced in Chapter 11, which is entitled blockchain-based protection of DC microgrid. It develops a technique for detecting the fault in DC microgrids. Besides, it tries to isolate the fault, leading to avoiding propagation of damage to the rest of the system. The main role of blockchain technology in this chapter is to encrypt the values sent to the differential relay so as to immunize the system against cyberattacks and communication failures. Finally the proposed method will be tested for a hypothetical DC microgrid.

Chapter 2

A panorama of applications of blockchain technology to energy

Matthew Gough^a,b; Rui Castro^c; Sérgio F. Santos^b; Miadreza Shafie-khah^d; João P.S. Catalão^{e a} Superior Technical Institute, Lisbon, Portugal
^b INESC TEC, Porto, Portugal
^c INESC-ID/IST, University of Lisbon, Lisbon, Portugal
^d School of Technology and Innovations, University of Vaasa, Vaasa, Finland
^e Faculty of Engineering of the University of Porto and INESC TEC, Porto, Portugal

Abstract

This chapter provides a panorama of potential applications of the blockchain technology to the energy sector. The chapter provides an introduction to the blockchain technology covering the main technological characteristics and providing some context to what is a rapidly emerging technology. Some limitations of the technology are also discussed along with key issues relating to the regulation of the technology. The chapter then highlights how the b...

Table of contents

• Cover image
• Title page
• Table of Contents
• Copyright
• Contributors
• Chapter 1: Introductory chapter: An overview of the book
• Chapter 2: A panorama of applications of blockchain technology to energy
• Chapter 3: Transition toward blockchain-based electricity trading markets
• Chapter 4: Decentralized operation of interdependent power and energy networks: Blockchain and security
• Chapter 5: The role of various market participants in blockchain business model
• Chapter 6: Blockchain and its application fields in both power economy and demand side management
• Chapter 7: Blockchain-based demand response using prosumer scheduling
• Chapter 8: Blockchain in decentralized demand-side control of microgrids
• Chapter 9: Blockchain for decentralized optimization of energy sources: EV charging coordination via blockchain-based charging power quota trading
• Chapter 10: Islanded microgrid management based on blockchain communication
• Chapter 11: Blockchain-based protection schemes of DC microgrids
• Index