Blockchain-Based Transactive Energy Framework for Connected Virtual Power Plants

Emerging technologies are helping to accelerate the ongoing energy transition. At the forefront of these new technologies is blockchain, which has the potential to disrupt energy trading markets. This article explores this potential by presenting an innovative multilevel transactive energy (TE) optimization model for the scheduling of distributed energy resources (DERs) within connected virtual power plants (VPPs). The model allows for energy transactions within a given VPP as well as between connected VPPs. A blockchain-based smart contract layer is applied on top of the TE optimization model to automate and record energy transactions. The model is formulated to adhere to the new regulations for the self-generation and self-consumption of energy in Portugal. This new set of regulations can ease barriers to entry for consumers and increase their active participation in energy markets. Results show a decrease in energy costs for consumers and increased generation of locally produced electricity. This model shows that blockchain-based smart contracts can be successfully integrated into a hierarchical energy trading model, which respects the novel energy regulation. This combination of technologies can be used to increase consumer participation, lower energy bills, and increase the penetration of locally generated electricity from renewable energy sources.

Automated summary

This article explores the disruptive potential of blockchain technology in energy trading markets and presents the application of blockchain-based smart contracts in distributed energy resource scheduling. The model complies with the new regulations in Portugal, resulting in decreased energy costs for consumers and increased locally generated electricity.