Blockchain for Transactive Energy Management of Distributed Energy Resources in Smart Grid

Abstract: This work presents the design and implementation of a blockchain system that enables the trustable transactive energy management for distributed energy resources (DERs). We model the interactions among DERs, including energy trading and flexible appliance scheduling, as a cost minimization problem. Considering the dispersed nature and diverse ownership of DERs, we develop a distributed algorithm to solve the optimization problem using the alternating direction method of multipliers (ADMM) method. Furthermore, we develop a blockchain system, on which we implement the proposed algorithm with the smart contract, to guarantee the transparency and correctness of the energy management. We prototype the blockchain in a small-scale test network and evaluate it through experiments using real-world data. The experimental results validate the feasibility and effectiveness of our design.

• The paper proposes a novel blockchain-based framework employing ADMM to address cost minimization in distributed energy trading.
• It implements smart contracts to facilitate decentralized optimization while ensuring privacy and tamper-proof energy management.
• Experimental evaluation on 48 NanoPi Neo2 devices demonstrated 150 TPS and sub-76 ms latencies, showcasing practical scalability for smart grids.

Blockchain for Transactive Energy Management of Distributed Energy Resources in Smart Grid: An Overview

This paper explores the implementation of blockchain technology to manage transactive energy within distributed energy resources (DERs) in smart grids. The authors present a meticulous framework utilizing blockchain for secure and efficient transactive energy, addressing fundamental challenges in integrating DERs into the grid.

Core Contributions

The paper introduces a distributed algorithm leveraging the Alternating Direction Method of Multipliers (ADMM) to address the cost minimization problem inherent in DER interactions, specifically energy trading and appliance scheduling. By employing the ADMM method, the algorithm ensures distributed optimization, enabling DERs to operate without reliance on a centralized aggregator.

A blockchain system is crafted to implement the aforementioned algorithm through smart contracts. This decision is motivated by blockchain’s transparent and tamper-proof architecture, which can enhance the trust and integrity of the energy management process. Smart contracts on the blockchain serve as executable protocols for the proposed algorithm, ensuring that the algorithm operates in a distributed fashion while preserving privacy and data integrity.

Experimental Validation

The paper includes a prototype implementation on a test network composed of 48 NanoPi Neo2 devices, simulating the environment of smart meters interconnected through blockchain. The evaluation reveals that the system achieves a peak throughput of 150 transactions per second (TPS) with confirmation latencies under 76 milliseconds. These performance metrics demonstrate the suitability of the blockchain system for executing decentralized energy management at scale.

Practical and Theoretical Implications

Practically, the blockchain-based system can transform DERs into autonomous entities capable of direct energy trading. The system's decentralized nature alleviates concerns associated with single-point failures and enhances privacy by eliminating centralized data collection.

Theoretically, the adoption of blockchain for energy management offers a paradigm shift towards decentralized systems, prompting further research into the integration of blockchain with other optimization techniques for smart grid applications. The exploration of blockchain’s role in enhancing security and trust within energy networks is another promising research direction.

Future Prospects

Looking forward, the development of more advanced consensus protocols tailored specifically for energy management scenarios could enhance the scalability and efficiency of blockchain implementations in smart grids. Exploring the integration of machine learning with blockchain systems to predict and optimize energy trading decisions could also provide significant value.

In conclusion, this paper presents a comprehensive exploration of blockchain’s potential in enabling decentralized energy management, offering pathways for future research and development in smart grid technology.