Blockchain Based Decentralized Management of Demand Response Programs in Smart Energy Grids

Abstract

In this paper, we investigate the use of decentralized blockchain mechanisms for delivering transparent, secure, reliable, and timely energy flexibility, under the form of adaptation of energy demand profiles of Distributed Energy Prosumers, to all the stakeholders involved in the flexibility markets (Distribution System Operators primarily, retailers, aggregators, etc.). In our approach, a blockchain based distributed ledger stores in a tamper proof manner the energy prosumption information collected from Internet of Things smart metering devices, while self-enforcing smart contracts programmatically define the expected energy flexibility at the level of each prosumer, the associated rewards or penalties, and the rules for balancing the energy demand with the energy production at grid level. Consensus based validation will be used for demand response programs validation and to activate the appropriate financial settlement for the flexibility providers. The approach was validated using a prototype implemented in an Ethereum platform using energy consumption and production traces of several buildings from literature data sets. The results show that our blockchain based distributed demand side management can be used for matching energy demand and production at smart grid level, the demand response signal being followed with high accuracy, while the amount of energy flexibility needed for convergence is reduced.