Permissioned Blockchains and Virtual Nodes for Reinforcing Trust Between Aggregators and Prosumers in Energy Demand Response Scenarios

Abstract

The advancement and penetration of distributed energy resources (DERs) and renewable energy sources (RES) are transforming legacy energy systems in an attempt to reduce carbon emissions and energy waste. Demand Response (DR) has been identified as a key enabler of integrating these, and other, Smart Grid technologies, while, simultaneously, ensuring grid stability and secure energy supply. The massive deployment of smart meters, IoT devices and DERs dictate the need to move to decentralized, or even localized, DR schemes in the face of the increased scale and complexity of monitoring and coordinating the actors and devices in modern smart grids. Furthermore, there is an inherent need to guarantee interoperability, due to the vast number of, e.g., hardware and software stakeholders, and, more importantly, promote trust and incentivize the participation of customers in DR schemes, if they are to be successfully deployed.In this work, we illustrate the design of an energy system that addresses all of the roadblocks that hinder the large scale deployment of DR services. Our DR framework incorporates modern Smart Grid technologies, such as fog-enabled and IoT devices, DERs and RES to, among others, automate asset handling and various time-consuming workflows. To guarantee interoperability, our system employs OpenADR, which standardizes the communication of DR signals among energy stakeholders. Our approach acknowledges the need for decentralization and employs blockchains and smart contracts to deliver a secure, privacy-preserving, tamper-resistant, auditable and reliable DR framework. Blockchains provide the infrastructure to design innovative DR schemes and incentivize active consumer participation as their aforementioned properties promote transparency and trust. In addition, we harness the power of smart contracts which allows us to design and implement fully automated contractual agreements both among involved stakeholders, as well as on a machine-to-machine basis. Smart contracts are digital agents that "live" in the blockchain and can encode, execute and enforce arbitrary agreements. To illustrate the potential and effectiveness of our smart contract-based DR framework, we present a case study that describes the exchange of DR signals and the autonomous instantiation of smart contracts among involved participants to mediate and monitor transactions, enforce contractual clauses, regulate energy supply and handle payments/penalties.