Blockchain for Distributed Energy Management

Human society is facing the grand challenges of climate change and ever-increasing energy demand. These challenges require us to re-shape the operation patterns of our energy generation, transmission, and consumption patterns. Electri- cal power systems hence need to be adapted to operate in a more efficient and sustainable man- ner, for example, accommodate more renewable energy. With this background, the concept of “smart grid” was proposed in the early 21st century, setting up the strategic goal to develop next-generation power systems.

The power distribution network which is central to smart grids is significantly characterized by high penetration of distributed renewable resources, flexible loads, and advanced sensing infra- structures. The transformation from a centralised to distributed energy generation pattern has led to the emergence of energy prosumers (producers-and-consumers), who are capable of generating and consuming energy simultaneously, for example, a building equipped with solar panels. This naturally raises the need for establishing an energy trading mechanism that is secure, maintains participant privacy, and fosters energy economics.

Secure and Private Blockchain for Energy Trading

Recently blockchain has attracted tremendous attention as a means to provide a distributed, secure, and anonymous framework for energy trading. Blockchain employs changeable public keys (PKs) to identify users, thus providing a level of anonymity. However, existing solutions suffer from a lack of privacy, processing and packet overheads, and reliance on trusted third parties to secure the trade. To address these challenges, we propose a secure and private blockchain frame- work. SPB enables the energy producers and consumers to directly negotiate the energy price without third party involvement, while protecting the anonymity of prosumers. SPB includes three novel features:

1. 1. Anonymous backbone routing: uses public keys for message routing decisions, which keeps the Internet address of the participants hidden.

      

   2. Atomic meta-transactions: couples the payment and energy provision transactions so that they are valid if both have been successfully completely, thereby avoiding malicious trading
   3. Certification of existence (CoE): allows a random smart meter to verify the identity of a trading smart meter, allowing the latter to keep its identity anonymous.

Full details of SPB are provided in [1], with a prototype implementation described in [2].