Blockchain-based decentralized energy market design and management structures

Jan. 01, 2021 to Dec. 31, 2023

With the increasing use of renewable energy, the power grid faces the challenge of handling the associated volatility in power generation. Electricity generation fluctuates depending on the weather and is increasingly decentralized, which means that the energy supply varies significantly from region to region. The ever-increasing interlinking of devices and systems via the Internet allows them to be operated and controlled flexibly and remotely. In this way, the supply and demand of electrical energy in the power grid can be influenced and coordinated. This flexibility offers excellent potential for stabilizing power grids and making efficient use of available energy.

Therefore, the BEST project will develop, implement, and study a power market bidding system (SMBS) that will enable power trading between facilities on the power grid. Participating plants - regardless of type (consumer, generator, storage) and power class (household or industrial) - are connected to and controlled by the SMBS via a central management system. Interfaces to smart meter gateways and an energy management system will be used to control downstream equipment and check and automatically bill the actual electricity flow. The electricity market bidding system will be implemented on the basis of open blockchain technology. This creates advantages in terms of security and transparency and the possibility of local interconnectivity without third-party providers. In a field test, the SMBS, the central management system, and the pooling platform will be tested in a real laboratory and industrial plants.

VISCOM, Grafik, BEST, 210222
Overview of the work packages of the BEST project partners Reiner Lemoine Institut/ Fraunhofer FOKUS

As part of the project, Fraunhofer FOKUS is in charge of the work package to develop a management system for blockchain-based decentralized energy markets. To enable decentralized electricity trading, the interaction between stakeholders in the energy industry, the providers of decentralized generation and consumption services, and the control and monitoring of decentralized energy systems must be supported by information and communications technology. Within the project, the requirements for such a system and its components are recorded, the interactions to be supported between stakeholders, system components, and plants are specified. Based on these findings, a component-based, service-oriented overall architecture of the central management system is developed. This includes the definition, implementation, or adaptation of data structures, interfaces, protocols, and algorithms, the implementation of interactions, the development of a graphical user interface, and the testing and integration of the system components. The central management system should be implemented in such a way that (business) critical interactions, in particular, can only be carried out by appropriately authorized services or stakeholders. Personal data and sensitive business or plant data (e.g., power offers or plant statuses) are protected within the central management system or when exchanged with other components (e.g., the SMBS). For this purpose, the scientists use technical solutions, e.g., for entity authentication and data encryption.

In addition to Fraunhofer FOKUS, the Reiner Lemoine Institut gGmbH (coordinator), fortiss GmbH, OLI Systems GmbH, Energieforum Leipzig GmbH, and Weserbergland University of Applied Sciences are also involved in the project. FENECON GmbH is participating in the project as an associated partner.