Blockchain-based transactive energy framework for connected virtual power plants

Abstract

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 paper explores this potential by presenting an innovative multi-level 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