A Decentralized Blockchain-Based Energy Market for Citizen Energy Communities
1.1. Aim and Scope
1.2. Literature Survey
- Proposing a decentralized framework for planning and operation of the future microgrids that takes care of both economical and technical constraints;
- Providing a two-stage consensus mechanism to maintain adequacy, security, and a global optimal operating point for the microgrid;
- Designing a layered structure based on contracts and P2P exchanges to increase the microgrid’s response time.
1.4. Organization of the Paper
2. Designing a Blockchain Network
- Client: Clients are the first layer in the microgrid, consisting of microgrid players . The microgrid players might consist of a wide range of load or energy producers. Considering the progress in IoT, every kilowatt hour of energy shortly contains the identity and personal details of the producer and end consumer. However, major players such as electric vehicles and small energy sources such as renewable energy, for which performance is always highly uncertain, are the largest loads. Blockchain, a private microgrid, is not accessible to all. Any player needs an endorsement to access it. Endorsers are companies that provide identity certificates to the microgrid players and review violations of rules and complaints. They are licensed by the organization supervising the microgrid. These companies can assign identity tokens to approved players. The player can use that token to participate in the microgrid directly or by proxy. This microgrid defines gas fee concepts used in all layers. In the blockchain, the gas fee is the fee each player suggests for performing the intended process. Each layer receives part of this fee according to the definitions of the microgrid. The higher the gas of an order is, the quicker it is considered in the subsequent layers. Gas has a significant impact on the market direction.
- Committer: As in the case of trading stocks on financial markets, each actor must use a brokerage firm to connect to the network and use its services . However, because most network actors are ordinary citizens who are not interested in complicated energy purchase systems, committers provide a set of different smart contracts to their clients. Smart vehicles can perform more optimally based on these smart contracts. A new concept is added to the network called “GAS” as the request-to-request fee, determined by contract type or the direct offer by the requestor.
- Anchor: Anchor’s particular advantage of using blockchain in a microgrid is the P2P process. This advantage is crucial over the life of the microgrid. Anchors  are specialized companies that manage P2P in the microgrid. Committers’ orders must be forwarded to them before being presented to the main chain of the blockchain. Each anchor has a unique area of activity in the microgrid. Each bus can be precisely in one anchor’s scope of activity. Committers forwarded their request to the relevant anchor based on the microgrid bus it belongs to. This way, all the orders tradable as P2P are received and settled before being offered to the main chain, making for a fast response time and less working load on the main chain. An anchor must run its simple optimization program according to the objective function and constraints (Equation 1). The optimization result should maximize the charge of all units capable of P2P trade and the company’s earnings in these exchanges.Here, is the energy ordering vehicle’s charge, is the ordering vehicle’s discharge, is the total charge ordered by each vehicle for that bus, and is the proposed discharge per bus per vehicle variable. All other orders not settled in the P2P mechanism are shared as a recommended package in a block pool.
- Orderer: In Hyperledger, orderers play the role of miners in a standard blockchain . They are the most critical layer of the network. In addition to the market supervision entity, they are the only blockchain members with access to the last operating point and the main chain. These companies’ function is the main difference between blockchains in the electricity industry and in other organizations. Orderers receive the orders by connecting to the block pool. To register a new order on the microgrid’s main chain, these companies must provide a new operating point based on the last operating point while observing all system constraints. These companies must provide an economic dispatch according to the last operating point by adding new orders. The new operating point is confirmed by the consensus mechanism of the microgrid. If the operating point is confirmed by consensus, they receive a part of the gas for the recommended package. Receiving the other part of the gas depends on the confirmation of the optimality of the operating point. This optimality is determined in the second phase of the consensus mechanism. Orderers are advanced algorithms on powerful servers that perform a high number of computations in the least possible time. They earn money by registering other players’ orders in the chain while observing the microgrid constraints.
3. Designing a Decentralized Microgrid
- The time interval of the main chain is one day. The market supervision entity registers the chain’s first block, the genesis block, which means the initiation of the chain. This block consists of the market’s daily initial operating point and the microgrid’s complete information. The decentralized microgrid can begin daytime activity based on this operating point.
- Each new block with a new microgrid operating point, microgrid consensus token, and the security code of hash of the last block in the main chain can be registered as a new block.
- If two blocks contain the main chain’s last security code, the block with a lower utilization cost for the rest of the microgrid is considered the main chain block. Otherwise, if the utilization costs are the same, the block registered earlier is regarded as the main chain block.
- The Hyperledger Fabric blockchain framework used in this paper provides a secure and private network for transactions. Using Hyperledger Fabric, access to data is limited to authorized parties, who participate in a permissioned network. In this way, the confidentiality of user information and the security of transaction data are ensured.
- In this network, private participants such as electric vehicles and smart homes can adopt anonymous identities to ensure that their information remains confidential. This feature applies to major cryptocurrencies such as Bitcoin as well, where although one can observe all participants’ transactions in the distributed ledger, their identities cannot be uncovered.
- Private participation is arduous for major and legal participants because they occupy a specific point in the network and exist uniquely. Even if they possess anonymous identities, the possibility of identification remains. However, it is crucial to consider which participant information is made public and which is accessible to specifically authorized entities. In this model, only selected representatives, namely, the committers, have access to all the details of the participants’ proposals as well as their smart and financial contracts. In practice, upon network approval orderers gain access solely to the limited information received from the committers. Consequently, all their information is be discernible to all network participants or to their competitors.
4. Consensus Algorithm
4.1. Proof of Work Algorithm (POW)
4.2. Proof of Stake Algorithm (POS)
4.3. Proof of Vote-Based Algorithm (POV)
- The new operating point is a correct power flow
- The allowable voltage interval of the bus and production range of the energy sources are observed:
- The cost of the rest of the system is declared accurately:Here, means the cost of the rest of the system, i.e., the total microgrid cost minus the new load cost. This is based on the internal cost , the cost of imported energy , the cost of exported energy , and the cost of a new order . In the above, P and represent energy and price, respectively. Confirming or rejecting the correctness of a block takes seconds. Each company can verify it through a simple algorithm. After the block is initially confirmed, the offering orderer receives fifty percent of the recommended package gas as the reward. In the second phase of consensus certification, all orderers can replace this new operating point block by registering a less costly one.
4.4. How the Proposed Decentralized Microgrid Works
- The independent operation loads the genesis block in the daily interval. It indicates an economic dispatch based on the latest load and microgrid generation.
- Smart load approved by endorsers can connect to the decentralized microgrid and forward their order to it through committers.
- Committers try to minimize energy costs by offering various offers and smart contracts according to the customers’ consumption. They manage the orders and forward them to anchors to be supplied by the microgrid.
- Anchors manage all internal P2P trades inside the microgrid. They transfer orders that cannot be supplied through local trading to the block pool.
- Orderers remove the new orders from the block pool according to the last operating point of the microgrid in the main chain using simple and fast, economic dispatch algorithms. They apply such orders to present a new operating point for registering in the main chain subject to the microgrid’s technical constraints.
- The Ripple two-stage consensus mechanism confirms this new operating point’s correctness and global optimality. In this consensus model, all the primary microgrid beneficiaries review the correctness of the new operating point according to the approved technical constraints. This review is carried out in a split second using a simple power flow algorithms subject to the microgrid constraints. The block is registered if approved by more than fifty-one percent of the microgrid.
- The final registering of the block is performed in the second stage of the Ripple consensus algorithm. If any orderer can provide a better operating point, then the previous block becomes a minor one and the new block continues the main chain. The new block can consist of several blocks. However, all previous orders must be considered, and the new block’s cost should be less. If a replacement block is not offered and the chain continues, the previous block registration is finalized in the chain.
- The microgrid is utilized based on the last confirmed operating point in the main chain. The process of the decentralized microgrid is shown in Figure 2.
5. Case Study and Discussion
- Decentralized management of a microgrid can utilize it at its optimal operating point while maintaining adequacy and observing its technical constraints.
- A decentralized combination of several optimization models based on Ripple’s two-stage consensus algorithm eliminates each model’s disadvantages and reaches a globally optimized solution.
- Smart contracts and P2P trades play an essential role in microgrid planning by improving response time, and can be used as an effective tool to direct the microgrid.
- Using several parallel algorithms in a decentralized system makes it much more efficient than a centralized one.
- The two-stage consensus model proposed in this paper ensures adequacy while observing local system constraints and achieves optimality of the final operating point of the system.
- The layered design makes the response time faster than its centralized peer and provides it with more flexibility, particularly in supplying local energy.
6.2. Future Work
Data Availability Statement
Conflicts of Interest
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|||Infrastructure||Manage the issues of extensive networks with massive data|
|||Infrastructure||Look for a robust, scalable mechanism in V2G network|
|||Infrastructure||A model based on existing blockchain structures|
|||Infrastructure||A model mainly depends on its consensus mechanism|
|||Infrastructure||Using the Internet of Things and small producers of renewable energies|
|||Infrastructure||The transaction structures are designed to be executable such as Solidity|
|||Infrastructure||Decentralized networks to interact between such islands|
|||Financial||Blockchain multi settlement base Peer-to-peer trading framework|
|||Financial||Financial systems include contracts, online, and multi stage settlement|
|||Financial||Contract model for electric vehicle base peer to peer|
|||Financial||Smart contracts managea decentralized microgrid|
|||Financial||Managing request sending in various algorithms such as iceberg|
|||Power Quality||Control the voltage using blockchain infrastructure|
|||Power Quality||A reward-punishment system based on voltage changes|
|||Power Quality||Focus on mixing centralized and decentralized approaches|
|Resilience against attacks||%50||%50||%20|
|Average response time||10 T/s||10–1000 T/s||1000 T/s|
|Number of electric vehicles||80|
|Electric vehicle battery sizes||36 kWh|
|Electric vehicle charger capacities||6.6 kW|
|PV generation capacities||200 kWp|
|Phase voltage magnitude limits||0.95 to 1.05 pu|
|EMS time-series resolution||30 min|
|Simulation time-series resolution||5 min|
|Final Cost System||3345 $||3352 $||3345 $|
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Mousavi, P.; Ghazizadeh, M.S.; Vahidinasab, V. A Decentralized Blockchain-Based Energy Market for Citizen Energy Communities. Inventions 2023, 8, 86. https://doi.org/10.3390/inventions8040086
Mousavi P, Ghazizadeh MS, Vahidinasab V. A Decentralized Blockchain-Based Energy Market for Citizen Energy Communities. Inventions. 2023; 8(4):86. https://doi.org/10.3390/inventions8040086Chicago/Turabian Style
Mousavi, Peyman, Mohammad Sadegh Ghazizadeh, and Vahid Vahidinasab. 2023. "A Decentralized Blockchain-Based Energy Market for Citizen Energy Communities" Inventions 8, no. 4: 86. https://doi.org/10.3390/inventions8040086