Initially, blockchain technology was designed to provide solutions in currency transactions. Over the past few years, the technology has been extended to non-currency solutions. The application of blockchain technology in most non-currency transactions focuses mainly on security mechanisms. Blockchain technology is also proposed for use in IoT devices, and the combination of blockchain technology and IoT is expected to facilitate the sharing of devices and resources, and allow secure execution of workflows in several industries including the energy sector.
Typically, energy production involves all the energy generation and supply practices; and energy supply uses, including the natural resources used for power generation and the type of transmission lines and transformers used for electricity distribution. Activities differ throughout the energy sector depending on the different actors (energy suppliers, power system planners, wholesale energy traders and markets, and electricity consumer) within the power system. From the energy sector perspective, it is evident that electricity supply is prone to security issues in the areas of electricity storage, transmission, provenance of power generation as well as power system management strategies. In this regard, blockchain technology could be the answer to solving security issues on the route from energy generation to consumption, thus providing visibility throughout the energy supply chain.
Figure 2 illustrates the proposed blockchain framework for distributed energy systems. The proposed blockchain powered energy network has prosumer energy records gathered at each microgrid and communicated through local gateways. The prosumer energy records are stored in distributed cloud servers, which will include personal information and energy generation and/or consumption history recorded through the individual prosumer smart meter. Each prosumer will have a personal identity (ID) and will be classified based on the microgrid area in which the prosumer is connected. In the proposed model, the assumption is that the microgrid is private and is managed by local prosumers connected to it. Therefore, the address of each prosumer on the blockchain will have the address ID of the prosumer’s smart meter, microgrid ID to which the prosumer is connected, and the address of the grid administrator, i.e., smart meter address ID, Microgrid ID, and GridAdmin ID. Since it is too expensive to store large datasets in the blockchain, it is more desirable to store only the prosumer addresses in the blockchain while the prosumer records are stored on a decentralised cloud storage. Consequently, only a URL linking the data set to the cloud storage is shared in the blockchain system. To retrieve a prosumer record on the decentralised cloud storage, the participating entity, e.g., system controller or regulator, needs to know the prosumer address which is visible in the blockchain. The arrows in Fig. 2 show the data flow of the proposed blockchain powered energy network.
The storage and access of data are done on the blockchain platform to ensure that the interactions between prosumers in the blockchain network are visible, immutable, and transparent. The data stored on the blockchain platform acts as pointers to the information of prosumers stored in the external distributed cloud server, so each data block on the blockchain platform will point to particular prosumer information in the distributed cloud server. The proposed blockchain powered energy network is a permissioned blockchain system, and below are detailed descriptions of the different components of the proposed blockchain powered energy network.
Microgrid manager: The microgrid manager plays an important role in sharing prosumer energy records in the energy network. This includes the control of all the prosumer transactions on the blockchain platform, including the process of data storage in local gateways and data access by prosumers. The information management capability is enabled through executing smart contracts that are built based on agreed policies of local prosumers connected to the respective microgrid.
Smartgrid administrator: The Smartgrid administrator manages all the transactions and operations of the decentralised cloud server. This is achieved through giving permission to prosumers and/or the regulator to add, change or revoke access to the decentralised cloud server. The Smartgrid administrator will deploy smart contracts to the Smartgrid and is the only entity that is able to add or modify policies in smart contracts of the smart grid. The Smartgrid administrator is not involved in the management of each local microgrid and will only interact with the microgrid when the latter needs to feed power into the national grid. The policies that are used in the smart contracts of the smart grid are adopted from the regulator. The Smartgrid Administrator is therefore the centre of communication between the regulator and the prosumer.
Decentralised cloud storage: Prosumer energy records are stored in a decentralised cloud storage e.g., the Interplanetary File System (IPFS), the Amazon cloud storage system etc, considering the functional capability of the distributed cloud storage system such as data retrieval, high storage throughput, no single point of failure etc. While the prosumer energy records are encrypted and stored in the decentralised cloud server system nodes, the hash values of the energy records are recorded and stored by the Smartgrid administrator in the blockchain platform. This is integrated with the smart contracts executed only by the Microgrid manager to ensure improved security and better data access management.
Smart contracts: Smart contracts are the core software in the proposed blockchain powered energy network, and can be accessed by all entities. The smart contracts are able to validate requests, grant access permissions and also identify the entity or prosumer triggering transactions or messages.
Energy records: The records are generated from execution of smart contracts. Each energy record is a transactional record that is generated by executing a smart contract and is a block of data. In order to access the energy record of a prosumer, the entity needs to provide information (e.g., prosumer smart meter address ID, microgrid ID) which must be signed using the prosumer cryptographic key at a certain given time (timestamp). The prosumer is able to grant, revoke, verify or confirm the data access request. The digital signature establishes trust between the prosumer and decentralised cloud server.
System controller/ regulator: The system controller and/or regulator is the entity that sets the policies to be followed by all prosumers in the grid. For example, it sets the electricity price at any given time of the day and the rules for each microgrid to feed electricity to the whole grid. The amount of electricity that must be fed into the grid at any given time is also determined by the system controller/regulator. It does this by liaising with the base load supplier to determine the deficit required in the grid. The regulator communicates with the prosumer through the Smartgrid administrator and microgrid manager. The regulator is also able to request information from the cloud server for any electricity customer or prosumer but is not able to write or change any information of the prosumer. This is required in cases where any malpractice in energy delivery needs to be investigated. In addition, the regulator also sets the policies to be observed when supplying electricity to the grid, e.g., electricity price and energy mix to be achieved in the grid at any given time etc.
Base load supplier/Eskom: The base load supplier is the main supplier of electricity to the national grid. It is usually for targeted supply such as industrial customers but also provides electricity for critical customers such as hospitals, security facilities etc. The base load supplier normally uses fossil fuel for electricity generation, e.g., Eskom in South Africa.
The proposed blockchain powered energy network enables data to remain private while allowing entities within the energy network to have the advantage of immutability and traceability. This means the management of complex supply chains like the energy supply chain and its payment can be automated. For example, a prosumer can order electricity and be assured of the source and location of the generating entity, whether it is generated using clean energy production etc., since the data would have been recorded in the smart contract. Furthermore, this is advantageous as it prevents any single point of failure in the network and a single node from controlling the whole network.