Blockchain Enabled Prosumer Oriented Energy Markets

Project Title

Blockchain Enabled Prosumer Oriented Energy Markets

Project Area of Specialization BlockchainProject Summary

In this project, we would primarily do research and development on blockchain-enabled prosumer-oriented electricity markets. Power has primarily been distributed via centralized power plants, traditionally running on fossil fuels. This setup however has detrimental effects on the environment and is inefficient due to huge losses because of the distance between the place where energy is being generated and where it is being supplied. Decentralized renewable energy systems offer a solution to this problem. This decentralization is expected to promote growth in peer-to-peer energy markets, where prosumers and consumers can trade electricity directly with each other on local energy rates. We would identify appropriate energy trading potential index, blockchain-based setup, and associated tradeoffs according to the specific requirements of the peer-to-peer community. We will also develop real-time energy trading algorithms using a double auction approach. A lab-scale demonstration of a blockchain-based energy trading platform would also be developed. In this demonstration, blockchain technology would be used to manage prosumers, record their energy production & consumption, match their buying and selling requirements, and track their financial settlements. This project would enable the early introduction and adoption of blockchain technology for a really useful energy-sector application in Pakistan. The project would also help in improving the understanding of the Smart Grid research community on the integration of blockchain in smart grid applications.

Project Objectives

The main objectives of the project are the following:

1. A methodology to determine the energy trading potential in a residential community based on variations in power demand and power generation capabilities of different households.
2. Identification of suitable combination of blockchain technology options and related tradeoffs for peer-to-peer energy trading application.
3. Development of efficient, low-complexity, and real-time double auction energy trading algorithm for blockchain-enabled energy trading in prosumer-oriented electricity markets. 
4. A lab-scale proof-of-concept of blockchain-based prosumer-oriented electricity market.
5. Identification of blockchain technology gaps and blockchain technology limitations for peer-to-peer energy trading applications.

Project Implementation Method

The project involves various research and development activities. The energy trading potential of a community would be determined based on the heterogeneity in the load demand and renewable power generation of various households in the community. We will use open datasets and NREL tools and use metrics like covariance, correlation, and cosine similarity to come up with an appropriate and generic index that captures energy trading potential in a residential community. We will then identify a suitable double auction algorithm in which both buyers and sellers of energy could provide bids and asks in various market rounds according to their requirements. The algorithm would be converted into a smart contract and appropriate APIs would be developed and used for this purpose. For the lab-scale demonstration, we will create a Quorum blockchain network with the help of single-board computers such as Raspberry Pis (Rpi). Each Rpi node will represent a household in the residential community with its power demand and power generation drawn from the realistic datasets. Each Rpi would also act as a node/server in a raft cluster, where Raft is the consensus algorithm used in the network. A smart contract would be deployed on these nodes and the market will be run in several rounds where without the help of a centralized auctioneer the matching of participants would be carried out through blockchain consensus.  By doing so, the system would avoid a single point of failure and the need for a third party to enable peer-to-peer energy trading. This demonstration would be helpful in showcasing the true potential of blockchain in the promotion of renewable energy in Pakistan.

Benefits of the Project

Through this project, we aim to move towards encouraging and normalizing the use of Renewable Energy Systems (RES). By establishing a blockchain-enabled prosumer-oriented market we will be able to incentivize traders to not only help reduce their carbon footprints but also benefit by financially capitalizing on this opportunity. Our project aims at establishing an electricity market where each market participant eligible to participate is able to maximize its gain from a transaction while ensuring there is no bias towards anyone. Implementation of this new and revolutionary technology will aid in tackling monopolistic behaviors in the electricity markets by providing a secure platform for peer-to-peer energy trading. One of blockchains most flagship feature is the transparency it offers by possessing immutable ledgers with all the transaction details available to the user. Furthermore, the creation of an index to assess the energy trading potential in an area ensures efficient implementation of this system with no resources being used unnecessarily.

Technical Details of Final Deliverable

The final deliverable would consist of a paper and a prototype. We will develop a novel index to determine peer-to-peer energy trading potential in a smart grid community. The index would be based on various factors in the community such as heterogeneity in consumption profiles of users, heterogeneity in the generation of users, geographical location, and number of prosumers and consumers in the community. The heterogeneity is measured using various statistical tools such as Covariance, Correlation, Euclidean distances, and Cosine similarity. We are attempting to produce a normalized index between 0 and 1, where 1 will represent maximum energy trading potential, 0 represents no energy trading potential and the intermediate values will signify partial energy trading potential. This index would then assist us in determining a threshold for when blockchain implementation in a peer-to-peer community market becomes feasible.

Following the index, the final deliverable will also contain a laboratory-scale set up that would simulate a real-life energy market. The simulation would use several RPis and one laptop to behave as nodes or participants of the network. We will begin by installing and booting the Raspbian Operating System into all four of Raspberry Pis, and enabling Secure Shell in each of them. The Raspberry Pi terminals will then be accessed using our laptops and will be connected to the same network as the laptop itself. Using the Advanced IP Scanner, we can then track down the IP address of each Raspberry Pi, which will be used for allowing the different nodes to interact with each other and send heartbeat messages. Finally, the laptop node will be used to deploy the double auction smart contract onto the blockchain, allowing each node to interact with it separately and commence the auction process.

Final Deliverable of the Project HW/SW integrated systemCore Industry Energy Other Industries Education , IT , Finance Core Technology BlockchainOther Technologies Internet of Things (IoT), Cloud InfrastructureSustainable Development Goals Affordable and Clean Energy, Industry, Innovation and Infrastructure, Responsible Consumption and ProductionRequired Resources

Item Name	Type	No. of Units	Per Unit Cost (in Rs)	Total (in Rs)
			Total in (Rs)	79400
Raspberry Pi 4 (4GB RAM)	Equipment	2	17000	34000
32 GB micro SD memory cards	Equipment	5	1400	7000
USB Wifi Dongle Device 3G	Equipment	1	1600	1600
USB Wifi Dongle Device 4G	Equipment	1	3300	3300
4 Ampere Rating USB power supply	Equipment	5	800	4000
USB Power Cable type-C	Equipment	5	700	3500
Raspberry Pi Portable Screen	Equipment	1	16000	16000
Printing Quota and Stationary	Miscellaneous	1	3000	3000
Travel cost for Data Collection	Miscellaneous	1	7000	7000