Blockchain and Internet of Things for Electrical Energy Decentralization: A Review and System Architecture

Abstract

The decentralization in the electrical power grids has gained increasing importance, especially in the last two decades, since transmission system operators (TSO), distribution system operators (DSO) and consumers are more aware of energy efficiency and energy sustainability issues. Therefore, globally, due to the introduction of energy production technologies near the consumers, in residential and industrial sectors, new scenarios of distributed energy resources (DER) are emerging. In order to guarantee an adequate power management in the electrical power grids, incorporating producers, consumers and producers-consumers (prosumers) together, it is important to adopt intelligent systems and platforms that allow the provision of information on energy consumption and production in real time, as well as for obtaining a fair price for the sale and purchase of energy. In this paper, we analyze the literature to identify the appropriate solutions to implement a decentralized electrical power grid based on sensors, blockchain and smart contracts, evaluating the current state of the art and pilot projects already in place. We also discuss a proposal for a power grid model, with renewable energy production, combining Internet of Things, blockchain and smart contracts.

A blockchain based lightweight peer-to-peer energy trading framework for secured high throughput micro-transactions

“…A JavaScript based smart contract simulation was implemented in order to find the performance of the algorithm. Casquicco et al 22 has analyzed bibliometrically a review of the decentralized energy trading architectures on Blockchain and IoT. They also reviewed on various proposals on P2P renewable energy trading, power grid model, and combining IoT and Blockchain.…”

Blockchain technology in the renewable energy sector: A co-word analysis of academic discourse

“…One of blockchain's most significant advantages is its ability to reduce economic inefficiencies by replacing complex bureaucratic procedures with simpler and more secure alternatives [ 59 ]. Traditional banking and financial systems often involve numerous intermediaries, each adding time and cost to transactions [ 60 ]. Blockchain technology can streamline these processes and reduce or even eliminate the need for intermediaries, leading to significant cost savings [ 36 , [61] , [62] , [63] ].…”

“…In the context of the renewable energy sector, blockchain technology has garnered significant interest, particularly for its role in advancing the Internet of Energy (IoE) [ 60 , [68] , [69] , [70] ]. This concept emphasizes transparent and decentralized networks where individuals and businesses, known as energy prosumers, can actively participate in energy trading platforms [ [71] , [72] , [73] , [74] , [75] ].…”

Blockchain Technology for Sustainable Management of Electricity and Water Consumption

“…It can also be achieved through the inclusive green way of thinking [5]. The current electricity and water management system is facing difficulty in keeping up with rising demand and regulatory complexity [6,7].…”

“…To promote green energy, a decentralized electrical power system was designed using sensors, blockchain, and smart contracts. The paper also proposed a power grid model that combined the IoT, blockchain, and smart contracts to produce green energy [6]. Local Energy Markets (LEM) are decentralized markets that allow members to exchange energy via a trading platform.…”