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978-1-5386-5160-6/18/$31.00 ©2018 IEEE
A Secured and Trusted Demand Response system
based on Blockchain technologies
Apostolos C. Tsolakis, Ioannis Moschos, Konstantinos Votis,
Dimosthenis Ioannidis, Tzovaras Dimitrios
Information Technologies Institute
Center for Research and Technologies – Hellas
{tsolakis, imoschos, kvotis, djoannid, dimitrios.tzovaras}@iti.gr
Pankai Pandey, Sokratis Katsikas
Department of Information Security and Communication
Technology
Norwegian University of Science and Technology
Gjøvik, Norway
{pankaj.pandey, sokratis.katsikas}@ntnu.no
Evangelos Kotsakis
Joint Research Center
Ispra, Italy
evangelos.kotsakis@ec.europa.eu
Raúl García-Castro
Computer Science School
Universidad Politécnica de Madrid
Madrid, Spain
rgarcia@fi.upm.es
Abstract—The aim of the proposed work is to introduce a
secure and interoperable Demand Response (DR) management
platform that will assist Aggregators (or other relevant
Stakeholders involved in DR business scenarios) in their decision
making mechanisms over their portfolios of prosumers. This
novel architecture incorporates multiple strategies and policies
provided from energy market stakeholders, establishing a more
modular and future-proof DR solution. By employing an
innovative multi-agent decision making system and self-learning
algorithms to enable aggregation, segmentation and coordination
of several diverse clusters, consisting of supply and demand
assets, a fully autonomous design will be delivered. This DR
framework is further fortified in terms of data security by not
only implementing cutting-edge blockchain infrastructure, but
also by making use of Smart Contracts and Decentralized
Applications (dApps) which will further secure and facilitate
Aggregators-to-Prosumers transactions. The blockchain
technologies will be combined with well-known open protocols
(i.e. OpenADR) towards also supporting interoperability in terms
of information exchange.
Keywords—blockchain, smart contracts, smart grid, demand
response.
I. I
NTRODUCTION
Demand Side Resources have already infiltrated the EU
energy market, playing a new active role in the electricity
distribution grids, as flexible components responding to new
grid fluctuations brought on by added levels of wind, solar and
other intermittent and volatile distributed generation resources.
Besides, recent EU targets aim in reaching a 20% share of
renewables by 2020 [1] which increases to at least a 27% share
by 2030 [2], with a simultaneous delivery of greenhouse gas
emissions reduction by 40%, hence creating a new energy
landscape is created. This new reality highlights a growing
need for increased operational flexibility as more renewable
capacity is added to the grid, with the application of Demand
Response (DR) strategies presenting the most efficient answer
to a reliable grid management. Either as a behavior-modifying
or an automated mechanism, DR is able to change the net load
shape and procurement of resources in response to the grid
needs. DR being a relatively new commercial mechanism (in
2013 Europe was almost entirely shut to DR) offers vast
margins of improvement to a rather unique energy market,
unwrapping opportunities for new solutions always in line
with the decarbonisation agenda. Taking also into
consideration the recent launch of the European Commission’s
Clean Energy Package in 2016 [3], the start of the large-scale
unlocking of Demand Response potential in Europe has been
marked.
Nevertheless, despite the numerous benefits by the DR
mechanisms introduced over the past decade, a lot of space
remains for improvements, especially in terms of
interoperability, security and privacy issues [4]. Given the vast
number of utilities, vendors and other energy market hardware
and software stakeholders, there is an abundance of
technologies currently deployed in the energy sector,
presenting a challenging heterogeneous landscape for DR
applications. Considering also the fact that the electricity
supply is of critical nature, the need for a secure energy flow is
imperative. Involved stakeholders must be able to verify the
authenticity and integrity of all DR signals at all times, while
untrusted entities must not be able to link DR signals to
specific stakeholders or infer private information about them.
In order to address these issues, and in the context of a novel
architecture that uses “virtual DR nodes”, the idea employs an
open well known standard (i.e. OpenADR 2.0) to ensure
interoperability, and although some level of standard
(Transport Layer Security – TLS) or high (CML signatures)
level security is provided, it also introduces an innovative
blockchain infrastructure, smart contracts and decentralized
applications to further fortify the information flow in the
envisioned DR schemes.
The paper is structured as follows: Following introduction,
literature review is presented in the form of related work on
blockchain technologies in Smart Grids and specifically
Demand Response schemes. In section III the proposed DR
framework is introduced, highlighting the extra layer novelty
along with the incorporated interoperability and security
features. Section IV emphasizes more on the Blockchain
IEEE INISTA (SMC) 2018, Thessaloniki, Greece, 3-5 July 2018
technologies within the proposed framework, followed by
Section V where major benefits of the proposed architecture
are discussed along with future endeavors, and finally, the
conclusions are drawn in Section VI.
II.
R
ELATED
W
ORK
As energy storage systems have just started to be utilized
in grid scale applications [5], electrical energy must still be
consumed as it is generated. And given also the fact that
energy demand keeps rising in an alarming rate, with new
generating plants not being an efficient solution, demand side
management strategies are called upon to take action, with
Demand Response being the most promising mechanism, at a
global level, that can enhance power systems’ flexibility
towards successfully absorbing RES penetration [6]. However,
DR schemes do not come without limitations. Two of the
limitations in terms of DR employment in the context of Smart
Grid technologies are interoperability and security.
To overcome the first limitation, significant steps have
been made by various entities such as the U.S. National
Institute of Standards and Technologies (NIST) [7], IEEE [8],
IEC [9], and CENELEC [10][11] through which a variety of
standards have been created to define Smart Grids in overall,
including DR. Nevertheless, with a highly diverse market in
terms of hardware when it comes to metering and smart
metering devices, these standards are most often overlooked.
To further address the issue of interoperability, a new alliance
was formed in 2010 to create an Open Automated Demand
Response standard for automating and simplifying DR [12].
Based on the OASIS Energy Interoperation Standard [13],
Open Automated Demand Response 2.0 [14] is an open and
standardized way for electricity providers and system
operators to communicate DR signals with each other and with
their customers using a common language over any existing
IP-based communications network. However, the most
common issue with open protocols is considered to be their
security. Even though OpenADR supports two security levels,
TLS and CML signatures, research has drifted towards another
security technology that upholds many more benefits, the
blockchain technology.
Recently, the introduction of Blockchain technology which
consists of a peer-to-peer decentralized transaction
environment can enhance the security, anonymity,
transparency and data integrity. Up until 2016, 80% of
Blockchain research was focus on the Bitcoin system [15],
which highlights the initial application of such technologies
for financial transactions without the need of a trusted
intermediary institution (e.g. a bank). However, the last few
years, blockchain technologies have erupted in multiple
domains, such as healthcare [16], real estate [17], and the
government sector [18].
Similarly to other domains, blockchain has also been
employed in the energy sector. Mihaylov et al. [19] firstly
worked on this by presenting another financial aspect of
blockchain application in energy transactions, especially for
renewable energy, by creating a decentralized digital currency
named NRGcoin. Through this new currency, without altering
the actual energy exchange, prices change depending on
measured supply and demand, whereas payment is defined by
trades in an open currency exchange market. Such approaches,
introduce a new market potential, where prosumers act on their
own self-interest, trade locally energy and ultimately balance
their supply and demand.
According to Mylrea et al. [20], a blockchain technology
of this caliber can offer various potential security and
optimization benefits if applied to the electricity infrastructure.
Namely, the adoption of distributed ledger technologies in the
energy ecosystem it can a) enhance the trustworthiness and
preserves the integrity of the data, b) support multifactor
verification through a distributed ledger, c) secure integrity of
transaction data, d) reduce costs of energy exchanges by
removing intermediaries, e) facilitate adoption and
monetization of DER transactions, f) facilitate consumer level
exchange of excess generation from DERs and EVs, through
smart contracts, g) enable consumers to also be producers,
providing additional storage and thus help substation
balancing from bulk energy systems, h) enable a more secure
distributed escrow to maintain ordered time stamped data
blocks that can’t be modified retroactively, i) enable rapid
detection of data anomalies may enhance the ability to detect
and respond to cyber-attacks, j) helps align currently dispersed
blockchain initiatives and facilitates technology deployment
through easy to implement and secure applications, and k)
potentially helps reduce transaction costs in the energy sector;
Moreover, Distribution System Operators (DSOs) can
leverage blockchain to receive energy transaction data
required to charge their network costs to consumers and
Transmission System Operators (TSOs) would have reduced
data requirements and constraints for clearing purposes.
In more detail, Paverd et al. [4] built upon OpenADR to
deal with security and privacy when dealing with demand
bidding using DR protocols. They enrich OpenADR with a
Trustworthy Remote Entity (TRE) that uses Trusted
Computing (TC), without forsaking though external entities.
Taking it a step further, Aitzhan et al. [21], explored the same
issues in decentralized Smart Grid energy trading, employing
blockchain technologies, and hence discarding the need for a
trusted third party, multi-signatures and anonymous encrypted
message propagation streams. Within a simulation
environment this system proved to be resistant to significant
known attacks. In a similar approach, but also including the
use of Smart Contracts, Pop et al. [22] were able to ensure the
programmatic definition of expected energy flexibility levels,
the validation of DR agreements, and balance between energy
demand and energy production in near real-time operation.
In most recent research, where energy sector cases [23][24]
have been specifically investigated in more technical detail
[25], promising results were also supported from the use of
blockchain technologies and smart contracts. However, they
also highlight the fact that current energy infrastructure is not
yet ready to support such technologies as the landscape it’s
still blur regarding the actors in a blockchain-based energy
transaction system. In addition, important technical aspects are
still not researched enough on the examined field (e.g. reactive
power flow) to enable practical application. Accordingly,
regulation and policies barriers should also be taken into
consideration, since this is a rather new field and not included
into existing or foreseen energy business models, rendering the
suitability of blockchain technology as the main ICT for
energy markets questionable [26].
From a different perspective, blockchain technology can be
further enhanced if combined with intelligent hardware
infrastructure that is based on the Internet of Things (IoT)
principles, a combination that allows automating time-
consuming workflows, achieving cryptographic verifiability,
as well as significant cost and time savings in the process [27].
When specifically applied for energy trading [28] towards
aiding Smart Grid operation [29], energy transactions can be
more reliable, efficient and effective while also exploiting
energy from microgrids, energy harvesting networks, and
vehicle-to-grids systems
In order to combine the interoperability provided by
OpenADR with the blockchain technology, and thus creating a
new paradigm in DR for future Smart Grid energy
transactions, an innovative architecture is proposed within the
proposed solution that combines both technologies into a
unified framework for an interoperable and secure DR design
that exploits to the utmost their individual benefits provided.
III. DELTA
A
RCHITECTURE
Within this rapidly evolving energy market, the proposed
solution comes as an ICT framework which aims to facilitate
the needs and reduce the risks of current energy market
stakeholders such as Aggregators and Retailers. In this context,
a secured Demand Response based on blockchain can support
the exploration of new market opportunities, effectively
reducing their carbon footprint and enabling better RES
exploitation.
From a technological perspective, the introduced solution
promotes a modular approach that delivers more power to
prosumers (both residential and commercial) over their energy
consumption and capacitates more stress-free Aggregators who
can establish DR strategies without the need to treat each
customer’s equipment separately by introducing a new layer to
the energy market. Fig. 1 depicts how the proposed concept
(namely DELTA) enables the transition from the current state-
of-the-art Aggregator-based DR, to the novel proposed de-
centralized ‘Virtual-Node‘-based architecture, which provides
energy clusters of customers (Virtual Nodes) that can be
handled as large prosumers from the Aggregators’ side.
By introducing these Virtual Nodes, the proposed
framework targets the hesitation of current aggregators to
utilize small customers in their energy portfolio. Outdated
metering technologies, undue complexity in the information
provided, lack of means for customers to respond to real-time
signals, limited actual commercially exploitable incentives, and
the absence of scalable integrated tools to support such
endeavours are some of the reasons that small and medium
customers have failed so far to meet their full potential when
participating in DR services and partially answers as to why
Aggregators avoid to include them in their assets. Thus,
resembling and enhancing the VPP concept [30], THE Virtual
Nodes represent the intermediary actors to facilitate and
securely deliver the essential energy information from a cluster
of end-users to the Aggregator. Finally, DR signals dispatched
will also take into consideration the overall stability of
distribution grid. The aggregator will have information about
the number and total size of customers per energy bus, per node
and will issue DR strategies that will not risk the grid stability.
Additionally, the role of the Aggregator is redefined: now,
not only it can include very small, residential-scale prosumers
into its portfolio, but also efficiently manage them, as
computational effort for such tasks is partially re-distributed
into the Virtual Nodes themselves. Hence, the DELTA
Aggregator will engage into a bi-directional DR
communication with the Virtual Nodes, after applying
advanced segmentation algorithms for creating DR Guidelines
that each Node should adhere to when dynamically re-
arranging the Node cluster. This new role will be further
improved by a Decision Support System that will analyze
current energy information by profiling every available Node,
evaluating the flexibility and availability of functional energy
assets, while also running simulations for effective and
efficient DR, flexibility and price forecasting, rendering
feasible to exploit existing and research DR strategies. On the
other hand, consumers/producers/prosumers will be equipped
with a fog-enabled lightweight toolkit in the form of a Fog-
Enabled Intelligent Device (FEID), providing the necessary
fog computation at end-users to handle DR signals, aggregate
information, act as a blockchain node (see the following
section), etc. FEIDs will be able to “learn” from previous
experience in order to correct next computational iteration in
order to provide more accurate information to the Node not
only in terms of real-time measurements but also for feasible
flexibility and realistic emission reduction scenarios.
Finally, this novel architecture is enhanced in terms of
interoperability through the OpenADR 2.0 standard, whereas
to fortify this non-proprietary and non-restrictive data
exchange that can lead to a low cost, information rich and
vendor-free solution, the DELTA DR framework will also
employ energy Smart Contracts that will capitalize upon
innovative blockchain infrastructure and will protect the
energy data flow. As can been seen in the following
architecture, different scenarios with different roles for each
stakeholder involved will be examined in order to fully
understand the capabilities of a decentralized energy
transaction scheme in the context of the existing energy
market hierarchy. Nevertheless, scenarios were centralized
control figures are omitted will also be investigated.
IV. P
ROPOSED
S
ECURITY
The DELTA security framework will try to couple
OpenADR security features and blockchain technology. From a
different topology of blockchain nodes, to innovative smart
contracts and easy to used dApps, a completely new security
suite will be designed, implemented and delivered to support
future DR mechanisms in a decentralized active Smart Grid.
Following a bottom up approach, the blockchain technologies
are envisioned as follows:
A. Blockchain Infrastructure
Investing on the proposed architecture presented above, the
overall blockchain infrastructure will form a fully functional
permissioned-based Ethereum blockchain network that will be
enforced through an optimally selected consensus protocol (e.g.
Proof-of-Stake, Proof-of-Elapsed-Time, etc.). In this direction a
blockchain permission based management system will be
utilizing regarding the Fog-Enabled Intelligent Devices to act
either as full blockchain nodes (nodes with mining capability)
or light blockchain nodes, based on topology and
computational power requirements on each deployed asset.
Since the DR framework targets a large amount of energy
customers through the proposed clustering process, a large
amount of FEIDs is expected to be included in the overall
solution (even if for the needs of the project only a few FEIDs
will be actually deployed). By adopting this approach, a rather
large amount of blockchain nodes is expected, making the
blockchain network rather durable to 51% attacks, where more
than half of total hashing power is concentrated in a few mining
nodes. In addition, Self-enforcing smart contracts are defined
and used to implement in a programmatic manner the levels of
energy demand response flexibility, associated incentive, as
well as rules for balancing the energy demand with the energy
production. Regarding incentives, and given the fact that the
proposed blockchain framework will not be linked directly to
any known digital currency (e.g. bitcoin, ethereum, etc.),
however the possibility of the adoption of a token-based system
can be used in order to better regulate energy transactions
among the various peers in the energy market scheme
proposed.
B. Smart Contracts
The introduced smart contracts will build upon the
Ethereum platform and use tools like EtherScripter and Solidity
to program smart contracts, while also using tools for Eclipse
IDE for smart contract applications. Furthermore, smart
contracts written in various languages, such as Serpent, Viper
and LLL, can be subsequently compiled into bytecode and
deployed to run on the Ethereum blockchain, thus, providing
interoperability regarding smart contract application.
The proposed Smart Contracts designed over the (DELTA)
blockchain-based distributed ledger will be used to ensure the
security and trust of the energy information exchange within
the DELTA energy network, enabling both energy data
traceability and secure access for stakeholders through the use
of certificates, relevant security standards and state of the art
security and privacy algorithms. In more detail, within the DR
framework an innovative design for a fully automated complex
contractual agreements system will be created, in which an
energy producer and a consumer can enter into a contract with
predefined conditions (e.g. capacity limits, number of daily
requests, incentives policy, contract expiration date etc.) that
will autonomously and securely regulate the energy supply and
payment. For instance, the smart contract can be programmed
such that if the customer fails to make payment on time, then
Fig. 1. DELTA Interoperable & Secure Demand Response Framework
the smart contract’s execution would automatically arrange for
the suspension of power supply until the payment is settled.
Moreover, Smart Contracts can be programmed to mitigate
(hedge) the risks associated with the fluctuation in energy
prices, security risks, and so on [31]. Through this
implementation it is expected that key benefits of Smart
Contracts will be fully exploited, including but not limited to
the ability to: 1) reduce transaction costs in creating,
monitoring, and reacting to obligations; 2) use new properties
for analyzing contractual arrangements that are only possible
when they exist in machine-processable form; and 3) enable
autonomous, computer-to-computer, contracting.
C. Decentralized Applications
To provide a complete solution to the energy market it is
necessary to develop the appropriate tools for the involved
stakeholders that will give them the capability to have access to
the DELTA blockchain infrastructure. To that end, a set of
decentralized applications (dApps) will be developed. These
dApps will give a user-friendly front-end environment to
access the DELTA Smart Contracts towards connecting
efficiently and securely to the DELTA blockchain
infrastructure, using existing known technologies (e.g. web3.js
Ethereum JavaScript API). Hence, the DELTA stakeholders
will be given roles, attributes, signatures, and other
authentication and authorization attributes to fully monitor and
manage the potential of the DELTA DR framework.
Each Smart Contract is accessed through a dedicated dApp,
which can be a web-based, mobile or desktop application,
providing access to the information exchanged in a
decentralized manner, as depicted in Fig. 2.
V. C
ONCLUSION
&
F
UTURE
W
ORK
This paper presented a novel DR architecture for
interoperable and secure energy transactions through the
combination of an open DR standard (OpenADR 2.0) and
blockchain technologies that will be implemented in the
activities foreseen within an EU H2020 funded RIA project:
DELTA. The envisioned DELTA DR framework proposed the
use of a special type of devices to each energy node, the fog-
enabled intelligent device - FEID, that will be capable of
undertaking not only energy-related tasks, such as aggregation
of measurements, flexibility calculation, forecasting, etc., but
also act as a blockchain node, either as a full or light type of
blockchain node, thus fortifying every DR related transaction
from and/or to each energy asset. Furthermore, the novel role
of the DELTA Aggregator is expected to define new limits
under which centralized control will be deployed in DR energy
markets, whereas efficient clustering of nodes will not only
improve portfolio handling, but also support the use of
blockchain technologies.
The overall solution, as currently designed, is based on the
open Ethereum framework, however other technologies are
expected to be also researched (e.g. Hyperledger, IOTA,
Tendermint, etc.) in order to present a more holistic approach
on designing an energy DR-related blockchain network that
will offer the optimal security-efficiency trade-off.
A
CKNOWLEDGMENT
This work is partially funded by the European Union’s
Horizon 2020 Research and Innovation Programme through
DELTA project under Grant Agreement No. 773960.
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