Blockchain-based local energy markets: Decentralized trading on single-board computers
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Blockchain‑based local energy markets: Decentralized trading on single‑board computers Kolja Heck1 · Esther Mengelkamp1 · Christof Weinhardt1 Received: 21 September 2019 / Accepted: 6 July 2020 © Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract Local, decentralized, and highly volatile electricity generation of renewable energy sources (RES) calls for new market approaches. Local energy markets (LEMs) match electricity production and consumption in a decentralized approach which reflects the distribution of the growing amount of RES. The blockchain technology, a distributed information and communication technology, supports the decentralized structure of LEMs and enables its users to directly interact with each other. In this context, we investigate blockchain-based LEMs on which prosumers (consumers that also produce) and consumers of a community are able to trade electricity without the need for intermediaries. A smart contract serves as a market place that accepts orders of all participants of a blockchain and performs a merit-order mechanism for efficient allocation. We verify the reliability of a private Ethereum blockchain and the smart contract through multiple simulations using real-life data. Furthermore, we compare two consensus mechanisms (Proof-of-Work and Proofof-Authority) of the blockchain regarding computational performance and assess whether a blockchain-based LEM can be run on small single-board computers, i.e. Raspberry Pis. Keywords Decentralization · Peer-to-peer-trading · Blockchain · Smart contract · Local energy markets · Renewable energy sources · Single-board computers
1 Introduction Existing energy systems struggle to include the growing number of renewable energy sources (RES) into the current grid structure[18]. Decentralization through distributed renewable power plants and the high volatility of electricity generation by RES represent major challenges[9]. One approach to address these challenges and reduce * Kolja Heck [email protected] 1
Karlsruhe Institute of Technology, Karlsruhe, Germany
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transmission and re-dispatch costs are local energy markets (LEMs). These enable consumers and prosumers to trade electricity within their community and intensify the involvement of small scale energy prosumers in the market[13]. However, the implementation of such LEMs can be quite complex, and therefore, we evaluate the suitability of the blockchain technology for such a use case[21]. Blockchains underline the decentralized structure of LEMs and promise a transparent, tamper-proof, and secure system which eliminates the need for intermediaries[17]. Thus, we present a LEM which is fully implemented on a blockchain. Each household is connected to the blockchain and automated agents place their orders in a market that is deployed on the blockchain. In order to connect the smart meters (intelligent electricity meters) of the households to the blockchain, additional hardware is necessary. For finding suitable hardware, we focu
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