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The maturity model for assessing blockchain applications in LEM.
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... The model was implemented by developing smart contracts used for running the merit-order market-clearing mechanism and implementing it in the Allga¨u microgrid. Notwithstanding the research works already developed in the field of blockchainbased LEM and few projects already conducted in this area, blockchain is still not matured for applications in LEM [36]. Zade et al. [37] compared a blockchain-based and a centralised LEM using their derived basic LEM requirements such as reliability, scalability, data security, tamper resistance, and low operation cost. ...
Blockchain‐based local energy markets have been proposed in recent years to provide a market platform for local prosumers and consumers to exchange their energy in a secured, transparent and tamper‐proof manner. However, there are still some challenges regarding the scalability of blockchain to handle high computational models/algorithms/contracts as this may result in the extension of the block size of the blockchain network and very high gas costs. Also, there is still the problem of transparency as regards General Data Protection Regulation because the full visibility of data in the blockchain may collide with privacy in some settings. A framework is presented that combines the on‐chain features of blockchain with trusted execution environments to develop a transparent, tamper‐resistant, low operation cost, scalable and resilient hybrid model architecture for local electricity trading. The model architecture was simulated in German community case scenarios for a varying number of prosumers and consumers to show its applicability. The simulation results show that the model was able to solve the scalability problem of blockchain for the local energy market application as the market model is run in a trusted environment where the integrity of the model can be verified by the participants.
... This feature always raise questions on the sustainability of blockchain for its application because of the large amount of gas required for complex calculations/transactions. Ref. [17] proposed a Cosmos sidechain network for trading energy in an LEM and showed that the platform is sustainable by applying it in a real case scenario of a small community in Switzerland. Notwithstanding the large knowledge already gained for blockchain application in LEM, researchers are still exploring the different blockchain features and the best way to apply them in LEM trading, hence, blockchain application for LEM is now growing beyound the maturity stage [18], [19]. ...
Local energy markets (LEMs) provide opportunity to handle the challenges arising from the lower grid level while using the traditional top-down approach to manage distributed generated renewable energy resources. Blockchain based local energy markets (LEMs) have been introduced in recent years as a way to enable local consumers/prosumers to trade their energy locally in a distributed and highly secured manner in an LEM. However, there are still some challenges regarding the main factors that can drive local consumers/prosumers to participate in a blockchain based LEM, optimal community size and prosumer to consumer ratio for an efficient LEM. Also, there is still no information on how the quantifying factors for participation on a blockchain based LEM can affect the performance of an LEM. This paper presents a survey and simulation based analysis of quantifying factors for participation in a blockchain based LEM. The survey was distributed among local consumers/prosumers and a total of 261 responses were received from the responders. The results from the responders were analyzed using a Python code based statistical analysis model. The simulation based analysis was conducted using a community based LEM model and evaluated using data received from a combination of German household profiles and standard load profiles. The survey results showed that the major drive for local consumers/prosumers to participate on blockchain based LEM is their willingness to support renewable energy integration, transparency and trust offered by a blockchain network. On the other hand, the simulation based analysis showed that small and medium communities with prosumers to consumer ratios between 0.3 to 0.5 create more economic and technical benefits for local consumers/prosumers compared to large communities. The community based simulation results were modelled together with the survey results to determine how the individual quantifying factors for participating in a blockchain based LEM can affect the performance of an LEM.
... BCT is accepted mainly in industries for its distinctive management of transaction settings. A lack of technological maturity for BCT is seen as one of the reasons for its unacceptance by organizations in PRS implementation (Richter et al., 2018). There is a requirement to commence several workshops and programs by the organizations to discover the BCT widely. ...
Product Recovery System (PRS) transfers products from their typical final place to their source to arrest some value on the product. There are obstructions, such as costs, associated with the modification of accounts and assessment of products and refunds associated with the implementation of PRS. Blockchain Technology (BCT) emerged as an innovative approach to constructing trust in a trust less environment and assures the availability, traceability, and security in data management. It also presents a valuable solution to PRS. This study aims to analyze the Blockchain Readiness Challenges (BRCs) to PRS in the context of manufacturing industries. The study observes 20 readiness challenges linked with the implementation of BCT in PRS. The BRCs are identified from the literature survey and confirmed after consequent examinations with industry experts and researchers. The study employed a Multi-Criteria Decision-Making (MCDM) i.e., the Decision-Making Trial And Evaluation Laboratory (Fuzzy DEMATEL) approach to find the cause-and-effect interactions to prioritize BRCs. The Maximum Mean De-Entropy (MMDE) algorithm was adopted to establish the threshold value based on the information entropy of the interactions among the BRCs for PRS. The fuzzy set theory was adopted to tackle the uncertainty and vagueness of personnel biases and data deficiency problems. The findings from this study reveal that inadequate financing for PRS exercises, lack of governance and standards, and security challenges to BCT implementation are the most influential readiness challenges for the adoption of blockchain in PRS. The study is useful to manufacturing organizations for identifying the potential BRCs to implement PRS among all existing readiness challenges so that they can take suitable measures before proceeding to adopt blockchain in PRS. The managers are suggested to eliminate the readiness challenges and widen the blockchain technology adoption in PRS.
... Blockchain technology has been driven by the vision to eliminate these intermediaries (Nakamoto, 2008). Accordingly, numerous proposals have been suggested to use the technology in electronic markets (Richter et al., 2018;Alt, 2020;Zhang and Wang, 2017;Notheisen et al., 2017;Noll and Alt, 2020). The concept of blockchain-based markets has opened a new area of research (see Section 7.2). ...
... Furthermore, total transparency is not an issue in this market. The overall trend towards local energy markets allows local communities to direct peer-to-peer energy trading without relying on large energy exchanges (Richter et al., 2018;Mengelkamp et al., 2018). However, even large energy exchanges, like the European Energy Exchange, have discovered the potential of decentralized markets and assessed the benefits of a blockchainbased market (Alt, 2020). ...
The digital transformation facilitates new forms of collaboration between companies along the supply chain and between companies and consumers. Besides sharing information on centralized platforms, blockchain technology is often regarded as a potential basis for this kind of collaboration. However, there is much hype surrounding the technology due to the rising popularity of cryptocurrencies, decentralized finance (DeFi), and non-fungible tokens (NFTs). This leads to potential issues being overlooked. Therefore, this thesis aims to investigate, highlight, and address the current weaknesses of blockchain technology: Inefficient consensus, privacy, smart contract security, and scalability. First, to provide a foundation, the four key challenges are introduced, and the research objectives are defined, followed by a brief presentation of the preliminary work for this thesis. The following four parts highlight the four main problem areas of blockchain. Using big data analytics, we extracted and analyzed the blockchain data of six major blockchains to identify potential weaknesses in their consensus algorithm. To improve smart contract security, we classified smart contract functionalities to identify similarities in structure and design. The resulting taxonomy serves as a basis for future standardization efforts for security-relevant features, such as safe math functions and oracle services. To challenge privacy assumptions, we researched consortium blockchains from an adversary role. We chose four blockchains with misconfigured nodes and extracted as much information from those nodes as possible. Finally, we compared scalability solutions for blockchain applications and developed a decision process that serves as a guideline to improve the scalability of their applications. Building on the scalability framework, we showcase three potential applications for blockchain technology. First, we develop a token-based approach for inter-company value stream mapping. By only relying on simple tokens instead of complex smart-contracts, the computational load on the network is expected to be much lower compared to other solutions. The following two solutions use offloading transactions and computations from the main blockchain. The first approach uses secure multiparty computation to offload the matching of supply and demand for manufacturing capacities to a trustless network. The transaction is written to the main blockchain only after the match is made. The second approach uses the concept of payment channel networks to enable high-frequency bidirectional micropayments for WiFi sharing. The host gets paid for every second of data usage through an off-chain channel. The full payment is only written to the blockchain after the connection to the client gets terminated. Finally, the thesis concludes by briefly summarizing and discussing the results and providing avenues for further research.
... Still, various factors are hindering their growth [75]. These collaborations of a significant number of participants and smart grid applications require a secure and reliable platform that can facilitate safe and reliable communication [76,77]. ...
Blockchain is considered a distributed ledger that can transact securely and trustfully without involving any third party. It has caused a lot of interest in various sectors, like government, finance, banking, etc. Blockchain technology is suitable for areas where multiple data storage and transaction types generally require the third party to authenticate the transactions involving transaction cost and authentication issues. In this paper, various aspects of Blockchain technology applications in public concern sectors have been analyzed in detail. This paper also reviews the multiple case studies and implementations of Blockchain technology in these sectors and their current status that provide a detailed insight into all the aspects of its application. This paper finally comes up with various implementation requirements in Government, Health, Finance, Economics, and Energy. Further, it identifies the challenges in successfully implementing Blockchain technology in these mentioned sectors to provide a reference for future deployments.
... 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]. ...
... LEMs allow residential households of a geographically constrained community to trade electricity locally amongst each other [15]. They potentially increase the involvement of a community in its energy generation and keep profits within the region by enabling the households to directly participate in the market [21]. This may additionally boost investments into local RES [15] and reduce energy costs for the market participants [21]. ...
... They potentially increase the involvement of a community in its energy generation and keep profits within the region by enabling the households to directly participate in the market [21]. This may additionally boost investments into local RES [15] and reduce energy costs for the market participants [21]. Asks and bids of all households are collected and matched either continuously or at discrete market closing times [13]. ...
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 Proof-of-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.
... Alternate algorithms like Proof of Stake (PoS), Practical Byzantine Fault Tolerance (PBFT), Delegated Proof of Stake (DPoS), Proof of Activity (PoAc) etc are adopted at the expense of security and decentralization. Authors of [31] discusses a sovereign blockchain-based system implemented on a smart grid creating a tamper-proof system for protecting consumer data recorded and transferred. The utilization of smart contracts in the model enhances the transparency between participants. ...
Smart grid is envisioned to be the technology capable of scheduling user's energy requirement based on demand and decentralized nature. These challenges pose extreme pressure on finding advanced technologies and sustainable solutions for secure and reliable operations of the power system working inside the blockchain technology for managing the exchange and trading of energy by means of specific tokens. For efficient utilization and functioning of the power grid we need a decentralised system which is transparent, trustless and makes transactions faster, there are a number of solutions proposed but none of them address the issue of transaction time in trade and penalty for defaulters. In this work we propose here an energy transaction network which implements blockchain technology for validating transaction of energy between producer/consumer or prosumer and saves energy and time using smart grids.
... Blockchain technology has been driven by the vision to eliminate these intermediaries (Nakamoto, 2008). Accordingly, numerous proposals have been suggested to use the technology in electronic markets (Alt, 2020;Noll and Alt, 2020;Notheisen, Hawlitschek, and Weinhardt, 2017;Richter, Mengelkamp, and Weinhardt, 2018;Zhang and L. Wang, 2017). The concept of blockchain-based markets has opened a new area of research (see Section 2). ...
... Furthermore, total transparency is not an issue in this market. The overall trend towards local energy markets allows local communities to direct peer-to-peer energy trading without relying on large energy exchanges Richter, Mengelkamp, and Weinhardt, 2018). However, even large energy exchanges, like the European Energy Exchange, have discovered the potential of decentralized markets and assessed the benefits of a blockchain-based market (Alt, 2020). ...
The manufacturing industry requires intra- and inter-organizational collaboration to cope with increasing cost pressure, high market dynamics, and sophisticated customer requirements. Therefore, many solu- tions emerged in recent years that enable the sharing or trading of production capacities in different industries. These solutions are based on a centralized platform. The business model of those platforms introduces transaction costs for users. Additionally, these platforms often create lasting dependencies, lack transparency, and therefore trust. At the same time, new technologies such as blockchain emerged, decentralized transactions, and promise to solve these various issues. This paper uses a design science research approach to develop an infrastructure for decentralized collaborative manufacturing. Therefore, we matched requirements for existing platform approaches to decentralizing technologies. To evaluate the approach, we conducted expert interviews to verify the usefulness and assess potential improvements to extend existing research dimensions of collaboration systems.
... A local electricity market (LEM) is defined in (Richter, Mengelkamp and Weinhardt, 2018) as an electricity market in a community that allows residential households and other community members to trade electricity generated in the community using a local platform. This allows the community as a whole as its individual members to be more active in energy related decisions and actions. ...
... They will strategically manage the individual and the community resources according to their goals, including the participation in external markets for energy and service provision and demand response opportunities. Moreover, LEM is also defined by (Richter, Mengelkamp and Weinhardt, 2018) as "marketplaces that enable prosumers and/or other local generating entities to trade energy volumes of their choosing within local communities". ...
Europe and, more particularly, the European Union (EU) has been pursuing ambitious goals in terms of energy, with pioneering energy policy pushing for more clean and affordable energy and highly competitive electricity markets. Electricity market design proved to be a challenge since the first models intended for further competition in the sector have been launched. With the increasing use of distributed and renewable-based electricity generation, electricity models became increasingly challenging. Other distributed energy resources, namely demand flexibility, distributed storage, and electric vehicles, are also bringing new requirements for electricity markets and open the way for local electricity markets. Although still an emerging concept, local electricity markets have huge potential, namely regarding increased gathering of the demand flexibility potential and to bring significant benefits to consumers. This chapter addresses the EU vision for electricity markets in the new context and discusses its benefits, risks, and future perspectives, highlighting the most important legislation, and some practical advances and implementations.
... The smart grid will be programmed to make effective the energy transfer. Disadvantages of this approach are to be found in the technological complexity to create an efficient and reliable system [9] [14]. To solve this problem, according to Pop et al. [12], blockchain can be used to govern smart grids. ...
This paper presents the definition and the implementation of a decentralized system for the energy trading managed by blockchain technology. The system, called Crypto-Trading, is composed by three interacting subsystems: the trading platform, the blockchain, and the smart meters system. It is conceived to exploit the IoT technology of smart meters and the decentralization of smart contracts working inside the blockchain technology for managing exchange and trading of energy by means of specific tokens. The paper defines the system as a decentralized application, identifying system actors and describing user stories. Then provides the description of the use case concerning the rechargeable token, one of the main feature of our system, and its interaction with the other components of the system. Finally, the paper compares our implementation choice with other ongoing projects in the field of energy trading.
