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VOLUME x, 2019 1
A. Aderibole et al.: Blockchain for Smart Grids
such as IoTs, edge computing, cloud computing, and artificial of a lack of the direction and misapplications of blockchain
intelligence. The framework proposal is still under devel- was the main motivation to perform a comprehensive study
opment hence it creates an opportunity to outline the goals of blockchain applicability in various smart grid applica-
for decentralized applications based on NIST’s conceptual tions and provide the smart grid research community with
model. Based on our previous research, including [4], [9] and a comprehensive reference and clear starting point for future
[10], and our feature analysis of blockchain technology and research.
its applications, e.g., [11], we have identified three critical Thus, in this paper, we survey and evaluate the applica-
blockchain features (decentralization, trust, and incentive) bility of the blockchain in smart grids with respect to the
and analyzed smart grid related literature to identify key three critical objectives that indicate a potential need for
requirements for decentralized version of NIST conceptual advantages supplied by the incorporation of the blockchain.
model. The main contributions of this paper are:
• Decentralization — to design the operations of the 1) Survey of the existing literature to identify the need for
smart grid, to improve automation, and to eliminate blockchain technology in smart grid domain.
the need for a central control unit, thus reducing the 2) The evaluation of smart grid domain needs with respect
possibility of a single point of failure, attacks, and col- to the main blockchain features.
lusion. Full decentralization assumes open, anonymous 3) The specification of a decentralized, blockchain-
joining and leaving the system and thus allows for a enabled version of NIST conceptual model.
plug-and-play functionality. The blockchain provides a Blockchain technology is a resource-intensive and compu-
platform for decentralized application deployment using tationally expensive technology for which it is critical to un-
computing resources from consumers, producers, and derstand the basic deployment requirements and constraints.
service providers and enables P2P network among them. For any solution, it is critical to fulfill these requirements
The operational control of decentralized applications is since the cost and overhead of running blockchain is high
determined through smart contracts on the blockchain compared to traditional centralized solutions.
networks. Section II covers a general understanding of blockchain
• Trust — to replace the traditional means of trust with and its operations with the aforementioned three critical
computational or mathematical trust. This enables dis- features explained in detail. Section III covers the smart
tributing trust among different nodes and ensures that grid domains and sub-domains and how blockchain can be
the operation rules are unchangeable unless the whole applied in each sub-domain according to the three mentioned
(or majority of) network agrees on them (depending on features. Section IV evaluates the application in each of
the details of trust design). The blockchain technologies the sub-domains. Finally, Section V summarizes the main
improve trust by solving the double-spending problem outcomes and conclusions are drawn.
using consensus protocols and distributed ledger tech-
nologies and ensuring immutability, tamper detection,
II. BLOCKCHAIN
resilience, scalability, and provenance in the smart-grid
Blockchain represents a cryptographically secure distributed
infrastructures.
digital ledger over a P2P network of computing devices and
• Incentive — to design system participation incentive in
systems. Blockchain is also defined as a distributed data
order to ensure ongoing and very-long-term functioning
structure whereby all data items are permanently recorded
of the system. Blockchain solutions need continuous
after they are verified by majority of the nodes in P2P net-
participation of the nodes; this participation is expensive
work. The key components of a blockchain system include:
and it is highly unlikely that nodes will continue partic-
1) linked linear data structures to incrementally append data
ipating unless there is a clear and long-term incentive
items (termed as transactions) in existing valid blockchains,
to do so, therefore, it enables cryptocurrencies and P2P
2) cryptographic algorithms to generate hash keys to anony-
transactions to incentivize the participating nodes and
mously access the data items on the blockchain, 3) consensus
enable non-repudiation on the network.
algorithms to ensure the validity of changes in already stored
These three objectives are critical since while significant data, and 4) message passing protocols to enable P2P com-
research effort and venture capital is getting invested in munication over underlying network. Blockchain technolo-
blockchain research, we have identified a lack of clear direc- gies use variety of consensus algorithms such as proof-of-
tion where this research is going, and we have also identified work [12], proof-of-stake [13], proof-of-activity [14], proof-
a number of research directions in areas that are less than of-authority [15], proof-of-burn [16], Byzantine fault toler-
ideal for application of blockchain technology, i.e., the areas ance [17], proof-of-elapsed time [18], proof-of-capacity [19],
where traditional solutions are more appropriate due to the proof-of-importance [20], and proof-of-benefit [21], to name
lack of a need to fully decentralize, or lack of a need for a few. We had reviewed and presented the above-mentioned
trust, or simply a lack of design of appropriate incentive consensus algorithms in our previous work [4]. We ob-
mechanisms that will ensure that a blockchain solution is served that proof-of-work is dominantly adopted by current
feasible and maintainable in the long term. This identification blockchain based technologies, mainly cryptocurrencies but
2 VOLUME x, 2019
A. Aderibole et al.: Blockchain for Smart Grids
Load
Operations Forecasting Customers
Electric
Vehicle
Microgrid
Cloud
Service
Computing
Providers Demand
Markets Response
Generation
Tracking Renewable Virtual Power
Energy Plant
Transmission Distribution
Energy Trading
FIGURE 1: Selected Domains/Sub-domains from Standard NIST Smart Grid Conceptual Model [8]
factories, and smart cities, to name a few. The key functions B. ENERGY TRADING
of these AMIs are remote meter reading, customer relation-
The deregulation of the electrical power grid has given rise to
ship management, demand-side management, and prepaid
the decentralization of electricity markets around the world
energy services. Furthermore, AMIs benefit electric utility
[25]. As a result of this, consumers are able to buy elec-
operators to ensure exact billing instead of estimated billing
tricity at favorable prices on spot and from future markets
and to detect frauds and energy thefts [7].
[26]. However, the designs of energy trading systems vary
Blockchain analysis: We found that blockchain applica- considering the variety in energy generation systems which
tions are needed to enable decentralized metering appli- could be as small as a domestic DER or as big as a com-
cations at multiple levels using devices and systems from mercial grade power plant. Therefore current energy trading
consumers, prosumers, and utilities. Considering the growth systems apply multiple centralized and decentralized trading
of IoT devices and energy consumption trends, the cen- strategies. The game-theory based strategies such as auc-
tralized data collection potentially hampers the smart grid tion mechanisms, stackelberg games, and non-cooperative
performance, and therefore, the smart grid applications could games are used to enable decentralized energy trading. In
improve through decentralized collection and verification addition, smart-contract based consensus protocols such as
of electricity loads from consumers. Moreover, blockchain proof-of-benefit also enable decentralized P2P energy trading
enables the utilities to obtain consensus-based feedback from among microgrid infrastructures. The centralized strategies
consumers. The underlying P2P networks and distributed use single-objective [27] or multi-objective [28] grid-wise
ledger technology of the blockchain systems are needed to optimization algorithms in energy trading systems.
ensure consensus-based energy consumption data sharing
Blockchain analysis: The number of prosumers in the
and collaborative utilization of energy resources among con-
electricity network are increasing rapidly. Blockchain tech-
sumers, prosumers, and utilities. The cryptocurrencies and
nologies are required to decentralize existing energy trading
incentive mechanisms are required to execute new decentral-
platforms which creates the opportunity for prosumers to
ized business models among prosumers and utilities.
perform direct P2P energy trading with consumers and other
prosumers on the network. In addition, blockchain enables
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A. Aderibole et al.: Blockchain for Smart Grids
the consumers to select specific energy sources from their Blockchain analysis: The blockchain enables DRMS at
preferred prosumers. Blockchain networks are also needed microgrids and consumers’ sites which ensures local load-
to decentralize the reputation systems for consumers, pro- balancing and saving operational cost of the centralized
sumers, and utilities. The resultant energy trading platforms DRMS. A typical DRMS usually involves a utility opera-
allow prosumers and consumers to efficiently trade electricity tor sending command signals to customers requesting load
at suitable prices during peak and off-peak demand periods in reduction for a specific period of time [33]. However, some
a highly decentralized manner [29]. In addition, blockchain is of the customers, such as hospitals, schools, public spaces,
required to ensure secure energy trade and privacy preserving and government offices are not always able to comply with
data storage. Therefore, decentralized ledger technology and the requests. The blockchain technologies are needed to
hashing algorithms can help ensure secure storage of energy decentralize the load request modules in DRMS. Apart from
resources and preserve privacy of transactional information. the load requests by DRMS, customers are also required
to initiate load requests to demand or shed the loads in
C. VIRTUAL POWER PLANTS exchange for cryptocurrency payments. Blockchain networks
Virtual power plants (VPPs) are software-as-a-service power can also facilitate mission-critical customers such as the
system structures consisting of grid-tied distributed energy operation theaters, electric rail operators, etc., to generate
resources with energy storage capability spread across a large the load reduction request on the network and IoT devices
geographical area whose aim is to supply electricity in a and systems, in return, voluntarily perform consensus-based
power system as a single entity [30]. With the concept of load reduction in their premises. Blockchain networks are
VPPs in smart grids, power can be generated closer to the also needed to execute new business models for P2P load
loads without the need to transmit power through transmis- request management between participating customers and
sion lines over long distances to minimize power losses [31]. prosumers.
VPPs facilitate in accumulating energy from variety of de-
centralized power sources and profile their performances and E. TRACKING RENEWABLE ENERGY
energy loads. In addition, VPPs provide functions to enable The electricity generation by renewable energy sources vary
direct market and intraday energy trade between utililies, due to weather conditions and time of the day, therefore,
prosumers, and consumers. smart grid operators need to track received power. Two
Blockchain analysis: Blockchain is a potential choice for types of tracking strategies are used: contract-path track-
VPP service providers to maximize their operational effi- ing method and renewable energy certificates (RECs). The
ciency (i.e., the generation and provision of electricity near contract-path method is a conventional technique which is
the consumers). Blockchain networks enable the service used to verify, track, and trace the sequence of ownership
providers to create decentralized energy requests to the near- of renewable energy from generation systems to consumers.
est prosumers and utilities from consumers. The prosumers Modern renewable energy tracking systems use RECs that
and utilities provide information about their available energy are tradeable commodities issued when 1 MWh of electricity
sources on the blockchain and VPPs compute decentralized is generated from a renewable energy resource and delivered
reputations based on the feedback from the previous con- to the electricity grid [34], [35].
sumers. VPPs prioritize the energy sources based on repu- Blockchain analysis: Blockchain technologies could be
tation scores which help generate and provide the electric- used to track energy certificates efficiently. Blockchain-based
ity to consumers. Blockchain networks facilitate the tamper contract-path tracking strategies use distributed ledger tech-
proof management of the reputation data, consensus-based nologies to record and transact the energy certificates. These
computation of reputation scores to ensure trust and decen- strategies benefit from tracking of decentralized ownership
tralization, and cryptocurrency-based incentive mechanisms of energy certificates, incentivize the trade using cryptocur-
to reward or penalize the prosumers and utilities. rencies, and perform P2P transactions. Similarly, blockchain
technologies are required to create new decentralized REC
D. DEMAND RESPONSE marketplaces for renewable energy producers, utilities, and
One of the avenues to achieve effective power systems is the customers. RECs do not guarantee that electricity generated
optimization of DRMS to minimize the variation of demand from a renewable energy source (RES) directly reaches the
and ensure it is always met by the available supply [32], buyer, as it is difficult to distinguish the sources of energy
[33]. Demand response (DR) is defined as the changes in once injected into the grid. However, they substantiate the
the electricity consumption of consumers from their normal generation and help grow the renewable energy market. A
levels as a response to variations in electricity prices over blockchain system eliminates the need of a central inter-
a time period [33]. It is always accompanied by payments mediary that ensures that RECs are not double-counted.
to motivate end-users to alter their electricity consumption The ownership history of each certificate is recorded on the
for a certain duration. Modern smart grid infrastructures use blockchain. This helps provide a tamper-proof and trans-
centralized DRMS to balance the electricity load in energy parent way of managing certificates for renewable power
distribution systems. Current DRMSs are deployed at grid and emissions allowances. Blockchain allows participating
levels hence require grid-wise load optimization functions. members to sell RECs at maximum profit. RECs incentivize
VOLUME x, 2019 5
A. Aderibole et al.: Blockchain for Smart Grids
renewable energy by providing a production subsidy to elec- strategies. However, the secure nature of blockchains would
tricity generated from renewable sources. always ensure that only trustworthy and tamper-proof data
are stored on the decentralized storage networks.
F. CLOUD COMPUTING
Cloud computing involves the provision of networking, com- H. ELECTRIC VEHICLES
puting, and storage services over the internet [7]. NIST’s A vehicle that is powered by at least one electric motor is
latest proposal aims to deploy cloud computing services to known as an electric vehicle (EV) [7]. The increased focus on
cater the needs of modern technologies and grid applications CO2 emission has led to the proliferation of EV. Apart from
such as, IoTs, edge computing, and artificial intelligence. The transportation, EVs also serve the purpose of storing and
provisioning of high quality edge-cloud computing services supplying power during off-peak and peak demand periods,
ensures low latency and high throughput application services respectively [7]. Bloomberg predicts that EVs will count
for customers, service providers, prosumers, and utilities. for at least 50% of newly sold cars in Europe by 2035.
Cloud computing was mainly used by utility operators in Considering such an unprecedented increase in electricity de-
NIST’s earlier proposals, however, the enablement of edge mand by EVs, the distribution network operating companies
computing and IoT devices in the smart grid networks will will install charging stations across the smart grid networks.
lead toward a plethora of new types of distributed and de- However, enabling DRMS and forecasting energy loads will
centralized applications for customers, prosumers, and mi- be a great challenge in the EVs era.
crogrids [7]. Blockchain analysis: The operation of EVs in a highly
Blockchain analysis: The deployment of the blockchain- decentralized manner seems like an obvious choice. Pro-
based edge-computing services enables decentralized inter- grammable computers embedded in EVs will be connected
action of P2P IoT devices across the smart grid. In addition, to wireless P2P network to benefit from blockchain for
blockchain facilitates decentralized data collection and pro- the following purposes: energy trading with the grid dur-
vides decentralized data management and storage services ing peak and off-peak demand periods; and participation in
near the data sources. The utilization of blockchain on the DRMS to generate decentralized demand requests. In addi-
edge-computing network benefits in terms of consensus- tion, blockchains can enable EVs to share their energy con-
based data reporting by consumer devices. In addition, it sumption statistics on different routes. Utilities can execute
lowers the data communication cost within the edge-cloud consensus algorithms to collaboratively filter these statistics
network. The blockchain-based data management also re- and guide EVs to appropriate charging stations.
duces the cost of data storage in the centralized system for
utility operators. I. CYBER SECURITY
Like other cyber physical systems, smart grid are suscep-
G. LOAD FORECASTING tible to cybersecurity attacks across whole underlying net-
Consumers’ electricity demand vary due to multiple factors, work [38]. NIST’s current proposal provides detailed require-
e.g., weather conditions, time of the day, pricing models of ment specifications of cybersecurity related components for
utilities [36], and specific events and festivals. Alternately, future smart grid implementations. The attackers or mali-
the electricity load keeps changing due to variability in cious users can launch reconnaissance attacks such as social
consumer demand, variation in incoming renewable energy engineering attacks to collect customer/utility credentials and
supply, the capacities of energy storage equipment, and ran- enter the smart grid network [39], [40]. Smart grid systems
dom disturbances in the smart grid (e.g., shutting down the are also vulnerable to scanning attacks whereby attackers
substations, fire incidents, or lightening due to bad weather). try to scan IP addresses, ports, and services to intercept the
Therefore, load forecasting helps in maintaining an equilib- communications channels and alter the data in transmitted
rium between electricity demand and supply in the smart packets. In addition, smart grid networks face system ex-
grid [18], [37]. It helps the operators to adequately schedule ploitation attacks such as viruses/worms/Trojan horses, de-
power generation operations and plan efficient DR strategies. nial of services attacks, man-in-the-middle attacks, replay at-
Blockchain analysis: Blockchain technology cannot be tacks, channel jamming, integrity violation, and privacy com-
directly applied to forecast load demand in a smart grid. promises [41]. Existing smart grid implementations mitigate
However, the integration of blockchain with decentralized the above-mentioned attacks from a central system which
storage systems (such as IPFS) aids system operators in leads towards inefficiencies considering the heterogeneity of
predicting future load demand by having access to accurate devices and systems in the smart grid networks.
and tamper-proof historical demand data. In addition, the Blockchain analysis: The decentralization of smart grid
transparency and availability of historical demand profiles resources over a P2P network enables blockchain to ef-
provide independent system operators with accurate data to fectively safeguard against potential hackers and security
aid them in planning and scheduling of power generation threats. The decentralization ensures multiple points of re-
without relying on a central utility. Blockchain can also sumption against security attacks. In addition, the consensus
enable the prosumers and utilities to acquire customers’ algorithms enable to collectively report and block malicious
past demand data that can aid them in planning future DR users, nodes, and applications on the smart grid. Blockchain
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A. Aderibole et al.: Blockchain for Smart Grids
TABLE 1: Trust, Decentralization, Incentives, and Blockchain Type for Selected Sub-domains
Sub-domain Decentralization Trust Incentives Blockchain Type
Metering High Medium High Private, BCaaS
Energy Trading High High High Private, BCaaS
Virtual Power Plants High High High Consortium, BCaaS
Demand Response High Low Medium Private, BCaaS
Tracking Renewable Energy Low Medium High Private, BCaaS
Cloud Computing High Low Medium Private, BCaaS
Load Forecasting Mediun Medium Low Private, BCaaS
Electric Vehicles High High High Private, BCaaS
Cyber Security High High High Private
Microgrids High High High Consortium, BCaaS
enables the users to collectively verify and validate new response in smart grids can be extended to microgrids.
software updates and downloads. It also enables to safeguard
against denial of service attacks due to multiple communi- IV. EVALUATION
cation points in the network. The decentralized detection of This section presents the evaluation of existing smart grid
intruders (i.e. software/devices/systems) and reporting on the architectures in the light of NIST’s reference architecture
underlying P2P network helps in safeguarding other parts in framework 4.0 (see Figure 2). The applicability of the
of the network. The enablement of decentralized storage blockchain technology to the various smart grid sub-domains
provides safeguard against data loss which is a major issue presented in the previous section is evaluated and presented
in current centralized smart grid systems. The decentralized in Figure 3 and Table 2. Furthermore, a state-of-the-art re-
identity management on blockchain enables users and de- view of the recent work on the application of blockchain to
vices to effectively communicate with smart grid systems. smart grid sub-domains is also presented in this section.
Similarly decentralized storage of public-private keys ben- The aim of metering is to accurately measure the consump-
efits in terms of secure communication and identity theft. tion and production of electricity at various points across
Finally, the data provenance feature of blockchain enables to the smart grid. As mentioned in the previous section, the
prevent recording false data in smart grid databases. Hence, AMI in smart grids are highly decentralized. Furthermore,
the increased security of customers’ and utility operators’ the proliferation of prosumers, microgrids and VPPs in smart
data are incentives that could drive the implementation of grids also ensures the presence of large amounts of meter-
blockchain to improve cyber security in smart grids. ing information. A blockchain thus provides a platform to
securely store this information in a tamper-proof manner.
J. MICROGRIDS As of the moment of writing this paper, there has been no
Microgrids are small-scale electrical power grids consisting work reported on the application of blockchain to metering
of DERs and energy storage devices employed to meet the in smart grids. Therefore, we anticipate that decentraliz-
local electricity and heating demands of an area [42]. Micro- ing a few operations (such as reporting electricity loads
grids are typically operated in either grid-connected or stand- to other customers and proving a collaborative consensus
alone mode. Stand-alone microgrids exist in remote areas that based feedback to centralized energy management systems)
do not have access to the utility grid for either economic of metering applications will enhance the trust among smart
or geographical reasons [43], [44]. It is envisioned that grid stakeholders and it will help in creating participatory
future smart grids will be made up of both grid-connected and inclusive customer-base for smart grids. In addition, the
and stand-alone microgrids. The microgrid systems provide utilities can offer customized pricing schemes and business
localization benefits in terms of data management, grid mon- models to customers and prosumers for participation and run-
itoring, automation and control, DRMS provisioning, energy ning decentralized metering applications. These applications
storage, load forecasting, and microgrid utilization. However, will utilize computing resources from customers’ domestic
microgrid management becomes challenging when electric- devices and blockchain services at edge servers enabled by
ity demands or depletion of storage resources [45] occur independent system operators.
in standalone microgrid infrastructures. In addition, energy Existing wholesale energy markets can operate in two
trading outside standalone microgrids is impossible. ways: through private contracts between individuals or
Blockchain analysis: Microgrids, particularly stand-alone through auctions and bidding. In both cases, transparency and
microgrids, are highly decentralized power systems. With the accuracy of electricity prices may be jeopardized. Moreover,
presence or absence of a utility grid; generation, markets existing wholesale markets fall short in real-time pricing due
and other aspects of a microgrid operation are inherently to the increasing number of volatile RES [46]. LO3 Energy
decentralized. Consequently, blockchains are applicable to established the Brooklyn Microgrid (BMG) project which al-
microgrids in areas such as, energy trading, demand re- lows P2P energy trading through a private blockchain, where
sponse, EVs and load forecasting. The issues of trust and the market is based on double auction and implemented via
incentives applicable to energy trading, metering and demand closed order book [47]. A market clearing price is determined
VOLUME x, 2019 7
A. Aderibole et al.: Blockchain for Smart Grids
Centralized Systems
Operational Control Center ISO/RTO Aggregator
Participants
Control Systems Transmission Ops Distribution Ops
Energy Advanced Retailer
Management System
Demand Response
Building Management Distribution Energy Market
Automation and System Management Clearing House
Control System System
Wholesaler
Reliability &
Market
DER Markets
Home Energy Management
Management Optimization System
System
Generator
Operational Enterprise Services Bus
operational communication
Edge Systems
for each specific time slot and competitive bid orders are entity (i.e. government). The incentive criteria is met in both
filled. The project tackles both virtual and physical layers of approaches by pricing the electricity above applicable taxes
the market platform, where a new microgrid is built along and fees and generating profits. However, this criteria is met
with the blockchain infrastructure. only if the average energy prices are lower than the external
This model still connects to the traditional distribution grid price [47]. Although several blockchain-based energy
grid to balance supply with demand. Mengelkamp et al. trading initiatives are underway, the transmission, generation
propose a similar approach to the BMG project but differs and distribution aspects of the smart grid present scalability
in the fact that the blockchain layer does not connect to challenges. To solve this challenge, there has been active
a separate microgrid [46]. Additionally, Mengelkamp et al. research done in regards to sharding and similar concepts,
provide an optimization model which minimizes the market’s however, it does not seem to have been implemented in
total electricity costs, as well as analyze agents’ behavior via energy trading yet.
a simulation outside of the blockchain where only the final VPPs have been gaining widespread attention recently
orders are forecasted into the blockchain [46]. This feature [48]–[50]. Although VPPs are highly decentralized systems,
indicates that information is gathered in a central system to there has been a limited focus on the ways that blockchain
be studied and the decentralization criteria for this feature is can be applied to this increasingly popular concept. Research
not met. Nevertheless, the energy trading process does follow efforts can be focused on how a trustless distributed ledger
the decentralization criteria. can be employed to store metering, trading and other sensi-
Both approaches confirm the trust criteria by keep- tive information from VPPs in a secure manner.
ing customer-specific data locally stored while forecasting In the previous section, it was determined that the demand
data generated from customers’ smart meters onto their response sub-domain of a smart grid meets the criteria of
blockchain accounts [46], [47]. An identity-based consensus decentralization, trust and incentives. Thus, DR programs to
mechanism is used to prevent corrupted agents from entering improve the efficiency of smart grids can be implemented on
the system by verifying the identities through a centralized a blockchain network. Some of the recent works in this area
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A. Aderibole et al.: Blockchain for Smart Grids
Centralized Systems
Operational Control Center ISO/RTO Aggregator
Participants
Control Systems Transmission Ops Distribution Ops
Energy Advanced Retailer
Management System
Demand Response
Building Management Distribution Energy Market
Automation and System Management Clearing House
Control System System
Wholesaler
Reliability &
Market
DER Centralized Markets
Home Energy Management
Management Optimization System
System
Generator
Operational Enterprise Services Bus
Edge Systems
FIGURE 3: Decentralized Smart Grid Conceptual Model based on the NIST Framework Proposal 4.0
include [51], where a blockchain system on the Ethereum decentralized manner, this model meets the decentralization
platform is proposed to manage DR events in a smart grid. criteria. Although the criteria are met, a blockchain approach
This platform allows distributed energy prosumers (DEPs) to to GoO is not capable of being put to use in the emerging
trade bids containing the amount of energy they are willing small-scale distributed generation industry (below 1 MWh)
to increase or curtail with the distributed system operator [53]. In other words, the number of prosumers plugged
(DSO) and store metering data in a tamper-proof manner. into the blockchain is limited to those with high production
In addition, [51] also proposes employing smart contracts capacity.
to ensure customers involved in DR programs comply with Cloud computing infrastructures are usually employed
agreements while distributing reward and penalties. The in smart grids to provide energy management, information
proposed blockchain presented is limited to DEPs making management and security services [54]. These clouds are
bids with the DSOs, however, a more sophisticated system normally centralized in nature. The advantages of cloud
can be developed which allows DEPs to make bids among computing include: flexibility and scalability [55]. While the
themselves in addition with the DSO. drawbacks of employing cloud computing are cost, security
Castellanos et al. propose a marketplace in which RECs and privacy of the relevant data. The decentralization of cloud
or Guarantees of Origin (GoO) are tokenized and traded computing in a smart grid can act to reduce the associated
among prosumers [52]. The market utilizes the Ethereum costs. Thus, in addition to increasing the security and privacy
Blockchain and smart contracts to enable transaction of to- of the data stored in the cloud, a blockchain platform can be
kens for Ether (ETH) which can be cashed out as incentives. employed in this regard. Recent works [56], [57] has been
The model is simulated using a Fixed Price Strategy and a done on the application of blockchain to cloud computing in
Variable Price Strategy. In the former strategy, the tokens general. To the knowledge of the authors, no work relating
are sold at the average market price of one GoO, while the to the application of blockchain to cloud computing in smart
latter allows prosumers to sell tokens at a price that falls grids has been reported in the literature. As a result, this area
between the cost of fossil and green energy. The simulations is highlighted as a potential research direction.
of both strategies indicated that the Variable Price Strategy There is currently no work in the existing literature apply-
is more profitable. Therefore, this approach meets the trust ing blockchain to load forecasting in smart grids. The benefit
and incentives criteria. Also, since the trade is occurring in a of allowing customers, prosumers and electricity generators
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A. Aderibole et al.: Blockchain for Smart Grids
in smart grids to broadcast their demand and generation While [59] proposes a localized P2P blockchain system to
profile on a decentralized network like a blockchain include: accommodate electricity trading and DR capabilities with
providing a distributed ledger containing historical data that incentives among EVs. Further work can still be done in this
would aid and improve the accuracy of future forecasting; regard.
equipping independent prosumers with accurate historic data In this paper, avenues in which blockchain can be applied
for planning and scheduling purposes to maximize profits to areas such as trading, cloud computing, consumption mon-
without the need for a centralized utility; allowing customers itoring through metering and load forecasting have been pre-
in general to plan DR response activities with the knowl- sented. However, the security and privacy of information and
edge of accurate past demand data. Moreover, the use of a data stored and transmitted in the network is important for the
blockchain would reduce the control of a centralized entity successful operation of blockchain networks in smart grids.
that might alter and skew past demand and forecasting data to In addition to providing basic security, the blockchain should
their own benefit at the expense of consumers and prosumers. inherently protect itself from cyber attackers without relying
By utilizing the advantages of the blockchain technology, on a third-party. Consequently, some published works have
a P2P network can be employed to trade energy among EVs studied and proposed ways in which blockchain technology
and between EVs and the power grid in a decentralized and can improve cyber security. In [62], a token-based private
secure manner. Moreover, EV-to-EV trading is also done for decentralization energy trading platform is implemented se-
peak shifting and demand response purposes [58]. Recent curely using blockchain technology. The privacy and security
work in this area can be found in [59]–[61]. An ethereum- of energy trading on this platform is made robust by em-
based blockchain was proposed in [60] to autonomously ploying multi-signatures and anonymous encrypted message
aid EVs to select charging stations based on bids, waiting propagation streams. Additional work on data protection in
and estimated charging time from different charging stations. smart grids using blockchain was proposed in [63]. The
Furthermore, a security model to protect transactions be- proposed solution involves applying the distributed security
tween EVs and charging stations is further studied in [61]. features of a blockchain to enhance the data security of smart
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A. Aderibole et al.: Blockchain for Smart Grids
grids against cyber attacks. Other works on the application of role of operations, generation, distribution, transmission,
blockchain to cyber security in smart grids are presented in customers, and markets, it is quite difficult to deploy and
[56], [64], [65]. manage the blockchain systems in these domains. Therefore,
Microgrids are typically comprised of renewable and non- it is difficult to integrate purely public blockchain systems
renewable DERs. This has led to the development of decen- whereby all domains can configure the blockchain nodes,
tralized control, optimization and other techniques employed perform mining and validation, improve the source code, and
to efficiently operate these microgrids [43]. Consequently, maintain a fair and open cryptocurrency environment. This
some of the benefits of a decentralized platform, such as a creates a big opportunity for service providers to integrate
blockchain can also be extended to improve microgrid effi- and monetize cloud-based (BCaaS) blockchain systems for
ciency. For instance, a P2P direct trading platform between most of the highly-coupled sub-domain operations.
consumers and prosumers on a blockchain has been proposed
in [66]–[68]. This direct transaction between prosumers and The service providers can help ensure the provisioning
consumers not only reduces costs, but also eliminates trust of BCaaS in the edge-cloud networks to enable spatio-
issues that might exist between these parties and utility op- temporal decentralization (e.g., microgrid-to-microgrid, EV-
erators in conventional trading platforms. Trading conditions to-grid, EV-to-EV, or customer-to-grid) which support local-
are enclosed in smart contracts to improve the transparency ized trust models and localized P2P transactions. In addition,
of the trading system. In addition, further work on applying service providers may enable consortium-based blockchain
blockchain to microgrid energy trading reveals that there is a solutions with a common cryptocurrency for energy trade
correlation between energy transaction and microgrid power between different standalone microgrids or main grids. The
losses variation [69], [70]. Most of the reported work in private blockchain deployment is most appropriate when all
literature focuses on the application of blockchain to energy the domains and sub-domains contribute as part of a single
trading in microgrids. However, similar to [71], the authors but fully decentralized system which may run at a country or
propose that more work can be done to apply blockchain to regional level. However, based on NIST’s current proposal,
other aspects of microgrid operation, such as: cloud comput- private blockchain systems are perceived to deploy grid-
ing, load forecasting and DR. specific decentralized applications to report cyber attacks
The applicability of blockchain technology to the key in the smart grid. Finally, we believe that after lowering
smart grid sub-domains with respect to the three critical the coupling and dependencies between domains and sub-
requirements has been discussed in this paper. Based on domains, service providers can enhance the applicability of
the decentralization, trust and incentive criteria, we found public blockchain networks for future smart grid operations.
that the largest impact of the research efforts is in energy These public blockchain systems will enable fully open and
trading, cybersecurity and demand response, respectively. transparent decentralized applications for completely local
The ability of a blockchain to provide highly decentralized energy trade between different entities.
platforms for trading, similar to the bitcoin blockhain, makes
energy trading the top sub-domain that can be enhanced with
the decentralization quality of blockchain. Moreover, the V. CONCLUSION
inherent ability of blockchain to secure data in the network
due to its cryptographic nature and consensus mechanisms, In this paper, the applicability of blockchain technology in
points to cybersecurity as a promising research direction for standard NIST conceptual model smart grids domains was
the application of blockchain in smart grids. Finally, demand presented to help identify and guide the decentralization
response is an incentive-based strategy employed for efficient of the smart grids. First, we identified key smart grid sub-
smart grid operations. Therefore, this leads to it being a domains that can be enhanced using blockchain technology
suitable research area for the application of blockchain in with respect to three critical blockchain features: decen-
smart grids. The solid application of blockchain technology tralization, trust and incentive. Second, the application of
in these three sub-domains can effectively drive the propaga- blockchain in each of the domains was evaluated based on
tion of blockchain technology in the other sub-domains such the three aforementioned criteria and the existing research
as microgrids and smart metering. One could attempt the in the literature. Finally, we identified key priority areas in
incorporation of the blockchain in these other areas first, but each domain and specified a decentralized blockchain-based
we believe that direction will make the overall integration and version of the NIST conceptual model. The critical future
standardization much harder and costlier due to the complex- research should be the analysis of blockchain impact on the
ity and widespread impact of energy trading, cybersecurity costs and efficiency of smart grid operations. Within each
and demand response solutions. selected domain, it is important to identify the concrete tech-
The operations of all seven domains in the NIST’s cen- nical issues and challenges. Some of these might show sig-
tralized conceptual model are tightly coupled and depen- nificant inefficiencies with respect to the achievement of the
dent upon one another, and as such, the implementation of core requirements of trust, decentralization, and incentive,
blockchain technologies is difficult in the fully centralized and in turn demonstrate potential superiority of centralized
grid systems. Furthermore, considering the non-technical approaches in some cases.
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A. Aderibole et al.: Blockchain for Smart Grids
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ADEDAYO ADERIBOLE was a MSc student at
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Khalifa University of Science and Technology,
for smart grid: A survey,” IEEE Transactions on Parallel and Distributed
Abu Dhabi, UAE. Currently he is a graduate stu-
Systems, vol. 26, no. 5, pp. 1477–1494, May 2015.
dent and a research assistant at MIT, USA. His re-
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computing based framework for big data information management of
search interests include smart grid and blockchain
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233–244, April 2015.
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L. Njilla, “Security implications of blockchain cloud with analysis of block
withholding attack,” in 2017 17th IEEE/ACM International Symposium on
Cluster, Cloud and Grid Computing (CCGRID), May 2017, pp. 458–467.
[57] C. Xu, K. Wang, and M. Guo, “Intelligent resource management in
blockchain-based cloud datacenters,” IEEE Cloud Computing, vol. 4,
no. 6, pp. 50–59, November 2017.
[58] R. Alvaro-Hermana, J. Fraile-Ardanuy, P. J. Zufiria, L. Knapen, and
D. Janssens, “Peer to peer energy trading with electric vehicles,” IEEE AAMNA ALJARWAN was a graduate student at
Intelligent Transportation Systems Magazine, vol. 8, no. 3, pp. 33–44, Fall Khalifa University of Science and Technology,
2016. Abu Dhabi, UAE. She completed her MSs in
[59] J. Kang, R. Yu, X. Huang, S. Maharjan, Y. Zhang, and E. Hossain, Systems and Engineering Management and BSs
“Enabling localized peer-to-peer electricity trading among plug-in hybrid
NoPhoto.png in Electrical and Electronics Engineering from
electric vehicles using consortium blockchains,” IEEE Transactions on
Khalifa University. Currently she is serving as
Industrial Informatics, vol. 13, no. 6, pp. 3154–3164, Dec 2017.
a research assistant and she is passionate about
[60] M. Pustišek, A. Kos, and U. Sedlar, “Blockchain based autonomous selec-
tion of electric vehicle charging station,” in 2016 International Conference
technology, entrepreneurship, and humane devel-
on Identification, Information and Knowledge in the Internet of Things opment.
(IIKI), Oct 2016, pp. 217–222.
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vehicle and charging pile management based on blockchain ecosystem,”
IEEE Access, vol. 6, pp. 13 565–13 574, 2018.
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energy trading through multi-signatures, blockchain and anonymous mes-
saging streams,” IEEE Transactions on Dependable and Secure Comput-
ing, pp. 1–1, 2016. MUHAMMAD HABIB UR REHMAN is cur-
[63] G. Liang, S. R. Weller, F. Luo, J. Zhao, and Z. Y. Dong, “Distributed rently working at center for cyber-physical sys-
blockchain-based data protection framework for modern power systems tems of Khalifa University in United Arab Emi-
against cyber attacks,” IEEE Transactions on Smart Grid, pp. 1–1, 2018. rates as a postdoctoral research fellow. He is cur-
[64] M. Mylrea and S. N. G. Gourisetti, “Blockchain: A path to grid modern- rently working on trustworthy Blockchain tech-
ization and cyber resiliency,” in 2017 North American Power Symposium nologies for intelligent cyber-physical systems.
(NAPS), Sept 2017, pp. 1–5. His main research activities include research and
[65] Z. Li, J. Kang, R. Yu, D. Ye, Q. Deng, and Y. Zhang, “Consortium development of trust models for decentralized and
blockchain for secure energy trading in industrial internet of things,” IEEE trustworthy artificial intelligence applications for
Transactions on Industrial Informatics, pp. 1–1, 2017. cyber-physical systems. He is also an alumnae of
[66] M. Sabounchi and J. Wei, “Towards resilient networked microgrids: DAAD’s postdoctoral network since September 2019. Habib is a bright spark
Blockchain-enabled peer-to-peer electricity trading mechanism,” in 2017
fellow and he obtained his PhD degree from faculty of computer Science and
IEEE Conference on Energy Internet and Energy System Integration (EI2),
information technology, University of Malaya, Malaysia. He completed his
Nov 2017, pp. 1–5.
bachelors and masters degrees in Pakistan whereby he received gold medals
[67] A. Goranović, M. Meisel, L. Fotiadis, S. Wilker, A. Treytl, and T. Sauter,
“Blockchain applications in microgrids an overview of current projects and 100% fee-waiver scholarships from COMSATS University Islamabad,
and concepts,” in IECON 2017 - 43rd Annual Conference of the IEEE Pakistan. Overall, he has authored/co-authored 40 international publica-
Industrial Electronics Society, Oct 2017, pp. 6153–6158. tions including journal articles, conference proceedings, book chapters,
[68] J. Wang, Q. Wang, N. Zhou, and Y. Chi, “A novel electricity transaction and magazine articles whereby his 04 articles are categorized as highly
mode of microgrids based on blockchain and continuous double auction,” cited publications by Web-of-Science. Dr. Habib’s research interests include
Energies, vol. 10, no. 12, 2017. blockchain technologies, cyber-Physical Systems, secure key management,
[69] E. R. Sanseverino, M. L. D. Silvestre, P. Gallo, G. Zizzo, and M. Ippolito, big data, edge computing, and industrial IoT. Dr. Habib is a professional
“The blockchain in microgrids for transacting energy and attributing member of IEEE.
losses,” in 2017 IEEE International Conference on Internet of Things
(iThings) and IEEE Green Computing and Communications (GreenCom)
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