Transactive Energy & Blockchain
Due to the increasing granularity and decentralization of the energy supply (and demand) in many countries, control techniques fit for the future are sought, with Transactive Energy (TE) being one possible approach. Within the framework of TE, concepts of controlling energy and power flows within power systems are described that use economic or market-based approaches. These approaches should enable an efficient, reliable and secure supply with (electric) energy.
Visions of TE are enabled by the growing availability of intelligent devices and distributed computing resources. This distributed intelligence enables generation and demand to engage in peer-to-peer communication, building a network as opposed to the uni-directional characteristic of traditional power systems. Furthermore, using intelligent agents, actors within the TE system (e.g. prosumers) can directly engage in peer-to-peer trading, for example on local energy markets. This way, local supply and demand are more balanced and costly infrastructure expansions at higher grid levels can be avoided.
Due to the inherent decentralized characteristics of TE systems, also using a decentralized market environment is conceivable. Distributed ledgers such as blockchain provide the technological foundation to design such a decentralized market. Actors of the TE system can trade with one another without the necessity of knowing or trusting each others, or the need of e central intermediary. This way, also a single point of failure (SPOF) and a single point of attack (SPOA), respectively, are avoided.
However, using distributed ledgers instead of a centrally operated digital platform typically comes with the disadvantage of higher cost and lower performance. Addressing these and other challenges is a key element of current research on the use of blockchain and distributed ledgers in TE systems.
Bichler, M., Gupta, A., & Ketter, W. (2010). Research Commentary—Designing Smart Markets. Information Systems Research, 21(4), 688-699.
Morstyn, T., Farrell, N., Darby, S. J., & Mcculloch, M. D. (2018). Using peer-to-peer energy-trading platforms to incentivize prosumers to form federated power plants. Nature Energy, 3(2), 94-101.