Permissioned Blockchains and Virtual Nodes for Reinforcing Trust Between Aggregators and Prosumers in Energy Demand Response Scenarios

Abstract—The advancement and penetration of distributed
energy resources (DERs) and renewable energy sources (RES)
are transforming legacy energy systems in an attempt to reduce
carbon emissions and energy waste. Demand Response (DR) has
been identified as a key enabler of integrating these, and other,
Smart Grid technologies, while, simultaneously, ensuring grid
stability and secure energy supply. The massive deployment of
smart meters, IoT devices and DERs dictate the need to move to
decentralized, or even localized, DR schemes in the face of the
increased scale and complexity of monitoring and coordinating
the actors and devices in modern smart grids. Furthermore, there
is an inherent need to guarantee interoperability, due to the vast
number of, e.g., hardware and software stakeholders, and, more
importantly, promote trust and incentivize the participation of
customers in DR schemes, if they are to be successfully deployed.
In this work, we illustrate the design of an energy system
that addresses all of the roadblocks that hinder the large scale
deployment of DR services. Our DR framework incorporates
modern Smart Grid technologies, such as fog-enabled and IoT
devices, DERs and RES to, among others, automate asset
handling and various time-consuming workflows. To guarantee
interoperability, our system employs OpenADR, which standardizes
the communication of DR signals among energy stakeholders.
Our approach acknowledges the need for decentralization and
employs blockchains and smart contracts to deliver a secure,
privacy-preserving, tamper-resistant, auditable and reliable DR
framework. Blockchains provide the infrastructure to design
innovative DR schemes and incentivize active consumer participation
as their aforementioned properties promote transparency
and trust. In addition, we harness the power of smart contracts
which allows us to design and implement fully automated
contractual agreements both among involved stakeholders, as well
as on a machine-to-machine basis. Smart contracts are digital
agents that “live” in the blockchain and can encode, execute
and enforce arbitrary agreements. To illustrate the potential
and effectiveness of our smart contract-based DR framework,
we present a case study that describes the exchange of DR
signals and the autonomous instantiation of smart contracts
among involved participants to mediate and monitor transactions,
enforce contractual clauses, regulate energy supply and handle
payments/penalties.