Blockchain and Internet of Things for Electrical Energy Decentralization: A Review and System Architecture

Manuel Casquiço,Joao L Afonso,Joao C Ferreira,Bruno Mataloto,Vitor Monteiro,Jose A Afonso

doi:10.3390/en14238043

Manuel Casquiço, Joao L Afonso + Show 4 more

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https://doi.org/10.3390/en14238043

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Abstract

The decentralization in the electrical power grids has gained increasing importance, especially in the last two decades, since transmission system operators (TSO), distribution system operators (DSO) and consumers are more aware of energy efficiency and energy sustainability issues. Therefore, globally, due to the introduction of energy production technologies near the consumers, in residential and industrial sectors, new scenarios of distributed energy resources (DER) are emerging. In order to guarantee an adequate power management in the electrical power grids, incorporating producers, consumers and producers-consumers (prosumers) together, it is important to adopt intelligent systems and platforms that allow the provision of information on energy consumption and production in real time, as well as for obtaining a fair price for the sale and purchase of energy. In this paper, we analyze the literature to identify the appropriate solutions to implement a decentralized electrical power grid based on sensors, blockchain and smart contracts, evaluating the current state of the art and pilot projects already in place. We also discuss a proposal for a power grid model, with renewable energy production, combining Internet of Things, blockchain and smart contracts.

Highlights

Electricity supply requires compliance with rules that depend on each country, so it is difficult to find a model that can be implemented without observing certain specificities, even knowing that the intention is to move from a centralized model of electrical energy production and consumption to a decentralized model
In most electricity markets, the installed production of the electrical power grid must be duly authorized by the licensing entity, and in close collaboration with the distribution system operator (DSO), in order to ensure that the public electrical power grid is able to absorb any excess of energy production, and guaranteeing the energy supply for the consumers, at all times
With the publication of new legislation across Europe based on the recent energy European directives, it is possible across the majority of member states to implement pilot projects for renewable energy communities, and several are already underway in order to test and evaluate different methodologies

Summary

Introduction

Energy transactions are carried out through a centralized model with several intermediaries, which corresponds to the old-century architecture of the electrical power grid, and is still presented nowadays. With the growth of energy consumption and population, there is a need to adopt new models that better respond to the needs of new cities, since the centralized model has higher financing costs and security of supply issues [1]. Decentralized models can achieve an improvement in performance and scalability of approximately 40% when compared to traditional centralized systems [2]; it is important to analyze how electricity markets work, as well as its regulations and actors, and to evaluate if there are conditions to promote decentralized solutions at a smaller scale

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