Master Project: Blockchain Technology for Electric Power Trading

This project investigates the integration of blockchain technology into electric power trading systems, focusing on its potential to enhance data security and efficiency within smart grids. The study explores the background of energy systems and the growing incorporation of renewable energy sources, highlighting the need for flexible and secure management solutions. The project objectives include analyzing blockchain's influence on smart grids, assessing its economic benefits, and identifying the challenges and opportunities in energy trading. The methodology involves data collection, simulation, and analysis, with expected results demonstrating blockchain's promise for various energy sector applications, including peer-to-peer networks and improved consumer participation. The project also outlines a work program with key tasks and timelines, and references relevant studies in the field, addressing the economic feasibility and sustainability of blockchain in the context of smart grids. The project aims to propose strategies to enhance the adoption of blockchain in energy trading, offering solutions to system security challenges and cost reduction.

MASTER PROJECT 1
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Contents
Background of the Study.................................................................................................................3
Objectives of Study..........................................................................................................................5
Project Question...............................................................................................................................6
Methodology....................................................................................................................................6
Expected Results..............................................................................................................................7
Work Program.................................................................................................................................7
References.................................................................................................................................................9

Background of the Study
Energy systems are undergoing continuous and rapid alterations with an aim of accommodating
the ever increasing volumes of incorporated renewable generation for instance solar PV and
wind energy (Mylrea and Gourisetti, 2017). Renewable energy sources have been noted to
undergo enormous development in the recent past, promoted by privatization, unbundling that
has been done in the energy sector as well as a boost from the various financial as well as energy
initiatives. 24.6% of the United Kingdom gross consumption of electric in the year 2016 was
generated by renewable energy sources majorly from offshore and onshore wind farms alongside
PV solar plants representing 44.9% and 12.5% of the cumulative 35.7GW installed renewable
energy sources capacity in that order (Albrecht et al., 2018).
Renewable energy sources are variable, challenging to predict ad a factor of the different weather
conditions, thus realising new management as well as operation challenges of the electricity
systems since more flexible measures are needed to ascertain safe operation and stability
(Mannaro, Pinna and Marchesi, 2017). Flexibility measures are among them integration of
supplies that are fast acting, devices for energy storage as well as demand response. Adding to
the transformational change as a result of distributed energy systems alongside renewables,
energy systems are at the verge of going into digital era as demonstrated by the enormous
adoption of smart meters in many countries.
In the change from the conventional power grid to smart power grids, the cost, efficiency,
demand as well as issues relating to emission need to be taken into consideration fully. As a new
and emerging technology, blockchain has been adopted extensively in numerous fields for the
benefits that it comes with (Andoni et al., 2019). The technology was in deed ignored and

rejected due to the numerous flaws that it had when it was first introduced but research has
established that such problems and adopted corresponding adjustments for instance measurement
research as well as re-parameterization exploration of blockchain to enhance the scalability.
The inclusion of blockchain technology within the energy trading is a story and an area of
research that tends to be promising with numerous studies having made efforts in the same
regard. Prior to a formal attempt to bring together blockchain wit energy trading model, some of
the researchers initially studied the application of the distributed systems to the market of energy.
Peer to per network model, as a proof by fact, allows the energy market to work in a consumer
centered way and promote the participation of the prosumers. Peer to peer network is able to
generate a competitive energy market besides enhancing the overall efficiency of the power
market. Still, the distributed systems are as well able to offer high precision demand response
signals, enhance speed alongside reducing cost (Chitchyan and Murkin, 2018).
Figure 1: Blockchain 1.0 illustration

Figure 2: Grouping of Blockchain-based Energy Trading
Objectives of Study
The main objective of this project is to establish how block chain technology can be integrated
into energy trading and its influence on the current as well as future state of current and power
sector alongside the extent of feasibility of the project for the present time. The major objectives
of this project include:
 Blockchain technology and its influence on the smart grid
 Architecture analysis of Blockchain technology
 Economic benefits of Blockchain technology (Doomernik, Lalieu and Brouwer, 2019)
 Analysis of the likelihood of adoption of blockchain in the energy trading for data as well
as information safety
 Identification of the main challenges of Blockchain technology in energy trading

 Identification of the main opportunities of Blockchain technology in energy trading
Project Question
Of most fundamental concern and question that will be answered or addressed by the end of this
research will be economic feasibility and sustainability of blockchain technology in smart grid.
Another question that will be addressed albeit upon implementation of the suggested procedures
will be the strategies as well as methods of enhancing the use of blockchain technology in energy
trading (Strüker, 2019).
Methodology
The focus of the project will be on industrial power or generation as smart grid concept is best
applied on a large scale, a situation that is ideal in the industrial set up. The project will conduct
an analysis of the solar generation as well as power consumption of energy connected to the
smart grid of the industrial power. There will be sharing of information as well as data and
comparison made against other similar projects to aid in further understanding as well as more
relevance in a broader sense (Khatoon et al., 2019). The objectives of the project will be met by
dividing the project methodology section into various segments or parts including:
 collection of data
 simulation and analysis of data
 incorporation of the suggested approach within they smart grid system
 Results analysis
 Opportunities for future research

Expected Results
The blockchain project as well as research initiates that will be investigated in this project would
demonstrate that blockchain is one the most promising technology for a broad region of services
and makes use of cases within the energy sector. The big numbers of established companies as
well as utilities which are currently taking part in the DLTs projects alongside the interest of the
investor in this region are a clear illustration of the potential value of such an emerging
technology for the energy industry as well as sector in general. Information within the
blockchain systems will be easily transferable at very low costs even though the validation as
well as verification of data comes along with high energy costs as well as hardware (Zhang et al.,
2017).
Introduction of blockchain technology into the energy trading systems will offer an advantage of
realization of high computing capacity having the blockchain being at low cost and the
consensus method may ascertain the optimal solution. Besides, it will aid in the prevention of
fake transactions alongside establishing a credit system that is open and transparent. The project
is projected to offer a solution to numerous system security challenges besides resulting in a
significant reduction of cost. In more general terms, blockchain technology in the energy trading
system will encourage the role of consumers within the system besides their choices (Küfeoğlu et
al., 2019).
Work Program
Possible breakdown structure of the work alongside the time table for the project is as shown in
the WBS below which is subject to alterations depending on the nature and stage of the project
and the result outcomes.

Task Name Duration Start Finish
Review of literature of suggested project 10 days Thu 01/08/19 Mon 12/08/19
Project analysis identify the major challenges 6 days Tue 13/08/19 Mon 19/08/19
Identification of methodology 5 days Tue 20/08/19 Mon 26/08/19
Analysis of preceding data 8 days Tue 27/08/19 Wed 4/09/19
Project planning & project proposal submission 7 days Fri 5/09/19 Thu 12/09/19
Collection of Data 7 days Fri 13/09/19 Wed 18/09/19
Blockchain technology architecture analysis 18 days Thu 19/09/19 Mon 7/10/19
Implementation & possible impact of blockchain technology for
future 14 days Tue 8/10/19 Tue 22/10/19
Analysis, writing & submission of project progress 10 days Wed 23/10/19 Mon 04/11/19
Simulation & analysis of results 7 days Tue 05/11/19 Tue 12/11/19
Making proposals for future recommendations 9 days Wed 13/11/19 Fri 22/11/19
Analysis of final report & submission 10 days Mon 25/11/19 Thu 05/12/19

References
Albrecht, S., Reichert, S., Schmid, J., Strüker, J., Neumann, D. and Fridgen, G., 2018, January.
Dynamics of blockchain implementation-a case study from the energy sector. In Proceedings of
the 51st Hawaii International Conference on System Sciences
Andoni, M., Robu, V., Flynn, D., Abram, S., Geach, D., Jenkins, D., McCallum, P. and Peacock,
A., 2019. Blockchain technology in the energy sector: A systematic review of challenges and
opportunities. Renewable and Sustainable Energy Reviews, 100, pp.143-174
Chitchyan, R. and Murkin, J., 2018. Review of blockchain technology and its expectations: Case
of the energy sector. arXiv preprint arXiv:1803.03567
Doomernik, J.P., Lalieu, L. and Brouwer, M., 2019. How Does the Energy Sector Explore
Disruptive Innovation: A Blockchain Case Study
Khatoon, A., Verma, P., Southernwood, J., Massey, B. and Corcoran, P., 2019. Blockchain in
Energy Efficiency: Potential Applications and Benefits. Energies, 12(17), p.3317
Küfeoğlu, S., Liu, G., Anaya, K. and Pollitt, M., 2019. Digitalisation and New Business Models
in Energy Sector
Mannaro, K., Pinna, A. and Marchesi, M., 2017, September. Crypto-trading: Blockchain-
oriented energy market. In 2017 AEIT International Annual Conference (pp. 1-5). IEEE
Mylrea, M. and Gourisetti, S.N.G., 2017, September. Blockchain for smart grid resilience:
Exchanging distributed energy at speed, scale and security. In 2017 Resilience Week (RWS) (pp.
18-23). IEEE

Strüker, J., 2019. Blockchain-Based Management of Shared Energy Assets Using a Smart
Contract Ecosystem. In Business Information Systems Workshops: BIS 2018 International
Workshops, Berlin, Germany, July 18-20, 2018, Revised Papers (Vol. 339, p. 217). Springer
Zhang, C., Wu, J., Long, C. and Cheng, M., 2017. Review of existing peer-to-peer energy
trading projects. Energy Procedia, 105, pp.2563-2568