Blockchain-based Energy Market

2. 1. Single home solar-power system
2. Local micro-grid
3. Interconnected microgrids
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3. LOCAL MICRO-GRID
We are dealing with a 2-sided marketplace: (1) consumers of energy, (2) producers of
energy (there can be some prosumers as well)
CONSUMERS:
Every household define its preferences, in terms of:
- What pattern of energy-consumption they will engage into, including:
- Fixed energy-consumption: e.g. 10kw/h at 10am
- Floating energy-consumption: eg. 10kw/h anytime during the day
- What is the maximum price they are willing to pay for it
- What is the minimum price that they are willing to re-sell the energy (e.g. in case
of scarcity)
These consumption patterns, along with the preferences of the households, are turned
into ​“buy orders”​.
PRODUCERS:
Every power generator define its capacity & preferences, in terms of:
- Expected Kilowatt / hour that they can produce (at maximum capacity)
- What is the minimum price at which they are willing to sell the energy
There production patterns and preferences are turned into ​“sell orders”
Internal blockchain at the local micro-grid level is used as the platform to register the
buy and sell orders, plus to find and execute matching orders.
The local grid’s energy production is done by a mix of solar energy and diesel energy.
According to the preferences and demand of each household, the power generators will
turn on / off in order to add / remove load from the network.
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4. INTERCONNECTED MICROGRIDS
When connected to another substation(s), the local substation:
1. Create an aggregate order for the local micro-grid:
The substation collect all orders within the local grid and update them to reflect
the new preferences of all households ( correcting for transmission losses ). It1
then aggregates them to create a common set of preferences for the grid as a
whole.
2. Update the local order book to incorporate the orders from the newly connected
substation(s), and try to match it internally with the micro-grid.
Each substation will now act as gateway to connect the orders from multiple microgrid.
The local substation can see all orders inside the grid, and match them to the outside
grid (taking account of the preferences of the households, e.g. if the households don’t
trust the order of the substation from a third-party grid, the orders will simply not
match).
When a match occurs, all users from the local grid will be informed of that match, so
that can then consume / sell electricity from / to the external grid.
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In practice, one should consider the low-​flow model: e.g. one cannot purchase energy from a
transformer too far away, because the electrons will simply not make it that far.
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5. Grid infrastructure
NET METERING:
Problematic because we want to be sure that people provide the maximum
capacity as their generators provide. Net metering does not allow the
system to monitor the actual consumption of the household, to make sure
that they respect the power-consumption that they have committed to.
SINGLE METER (on consumption side):
Good because we can use the consumption meter to limit the amount
energy that can be used by the household, according to the buy orders.
Problematic because it is hard to assess the actual quantity of energy that
is generated.
DOUBLE METER (on production and consumption):
One meter calculates the amount of capacity that you put into the system,
the other calculates the consumption (it can also be used to limit the
consumption to what the household has paid). In case of scarcity, or if
more energy is needed, the household will just need to place new buy
orders.
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6. Blockchain infrastructure
Criteria to chose the choice of blockchain :
- Latency/Block Time
- Security
- Operational cost
- Connectivity requirements (constant connection? Quality of connection?)
Ethereum: highest need for connectivity, low latency
1. Every smart meter is mining, burning electricity to solve PoW to validate
transactions.
2. Light clients smart meters trust a third party to mine
Tendermint​: best latency, least connectivity
1. each member figure out among themselves how the state of the market is.
Lower-latency;
Lightning network (state channel):
- Possibility to create a ‘state channel’ within the micro-grid private network, and
put money (bond) at the global network, with a timeout.
- Within the private network, they transact and then publish the result to the global
network within the timeout. If you dont publish within the timeout, the transaction
is ignored.
E.g. if malicious neighbor blow up a battery, other tries to communicate information on
the network so as to get the security-deposit to pay back the battery, but the malicious
neighbor DDOS them so that the timeout expire and they cannot get the bond money
back.
AppShard: guarantees upfront;
local network ask someone from the global network to facilitate the interaction. When
creating the ‘bond’, ask for a guarantee that the person creating the bond will receive
the msg’s. In Africa, you’d ask the Telco to ensure a guarantee that the msg will get
back.
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7. Smart contracts infrastructure:
Every user register their own devices to the system (solar, diesel generators)
The system assess individual capacity and register it into the system.
Bonds: All users put a large bond upon registration to address failure modes
PRODUCERS​:
Users “bid” their actual consumption pattern, and the system places sell orders
according to the difference.
Sell order takes the form of:
● Kilowatt [min-max range] / hour @ date {min-price}
In case where there is less energy generation than expected:
- If this is due to an external force of nature (eg. because of clouds): no
punishment, the system will adjust pro-rata the amount of electricity given to
everyone.
- If this is due to lack of proper maintenance, or simply because it remove the
panel from the system, the producer will be punished (by eating the bond)
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8. BUYERS:
People can put different kind of buy orders
- Fixed buying orders (with a price-range): if scarcity, the system can automatically
place a new order at a price up to the max range
○ Kilowatt [min-max range] / hour @ date {max-price}
- Floating buying orders (with flexible time): if scarcity, the system can
automatically put as a “sell-back” down to min-price.
○ Kilowatt [min-max range] / hour @ date {max-price; min-price}
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