Enabling Peer to Peer Energy Trading Marketplace Using Consortium Blockchain Networks
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Description
Blockchain technology enables peer-to-peer transactions through the elimination of the need for a centralized entity governing consensus. Rather than having a centralized database, the data is distributed across multiple computers which enables crash fault tolerance as well as makes the system difficult to tamper with due to a distributed consensus algorithm.
In this research, the potential of blockchain technology to manage energy transactions is examined. The energy production landscape is being reshaped by distributed energy resources (DERs): photo-voltaic panels, electric vehicles, smart appliances, and battery storage. Distributed energy sources such as microgrids, household solar installations, community solar installations, and plug-in hybrid vehicles enable energy consumers to act as providers of energy themselves, hence acting as 'prosumers' of energy.
Blockchain Technology facilitates managing the transactions between involved prosumers using 'Smart Contracts' by tokenizing energy into assets. Better utilization of grid assets lowers costs and also presents the opportunity to buy energy at a reasonable price while staying connected with the utility company. This technology acts as a backbone for 2 models applicable to transactional energy marketplace viz. 'Real-Time Energy Marketplace' and 'Energy Futures'. In the first model, the prosumers are given a choice to bid for a price for energy within a stipulated period of time, while the Utility Company acts as an operating entity. In the second model, the marketplace is more liberal, where the utility company is not involved as an operator. The Utility company facilitates infrastructure and manages accounts for all users, but does not endorse or govern transactions related to energy bidding. These smart contracts are not time bounded and can be suspended by the utility during periods of network instability.
In this research, the potential of blockchain technology to manage energy transactions is examined. The energy production landscape is being reshaped by distributed energy resources (DERs): photo-voltaic panels, electric vehicles, smart appliances, and battery storage. Distributed energy sources such as microgrids, household solar installations, community solar installations, and plug-in hybrid vehicles enable energy consumers to act as providers of energy themselves, hence acting as 'prosumers' of energy.
Blockchain Technology facilitates managing the transactions between involved prosumers using 'Smart Contracts' by tokenizing energy into assets. Better utilization of grid assets lowers costs and also presents the opportunity to buy energy at a reasonable price while staying connected with the utility company. This technology acts as a backbone for 2 models applicable to transactional energy marketplace viz. 'Real-Time Energy Marketplace' and 'Energy Futures'. In the first model, the prosumers are given a choice to bid for a price for energy within a stipulated period of time, while the Utility Company acts as an operating entity. In the second model, the marketplace is more liberal, where the utility company is not involved as an operator. The Utility company facilitates infrastructure and manages accounts for all users, but does not endorse or govern transactions related to energy bidding. These smart contracts are not time bounded and can be suspended by the utility during periods of network instability.