Blockchain or Aggregator? An Assessment of Service Provision Approaches for Prosumer Engagement in Grid Congestion Management

Abstract

Distributed load-management is seen as a means to enhance the integration of fluctuating renewable energy sources into the energy system and address the increasing strain on the German electricity grid. However, the advantages and disadvantages of different service provision approaches for this application, in particular blockchain-based solutions in contrast to aggregators, have not yet been investigated, a research avenue important to inform policymakers in the early stages of market and technology development. The sustainability and feasibility of three approaches, public blockchain, consortium blockchain and an aggregator using a relational database, were evaluated for their suitability to provide grid redispatch services through prosumer engagement, according to seven criteria by applying a multi-criteria analysis (MCA). The three feasibility criteria considered were scalability, regulatory acceptance and implementation network capacity, while the four sustainability criteria considered were privacy, security, costs and energy consumption. The analysis showed that public blockchain is least suitable for this application, whilst consortium blockchain and an aggregator using a relational database perform similarly on sustainability criteria, with the consortium blockchain performing better on security and the aggregator model on energy consumption. From a feasibility perspective, an aggregator using a relational database clearly outperformed blockchain solutions, suggesting better suitability at this point in time, with a need for regulatory innovation to allow for the future adoption of blockchain models.