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Smart Contract Design in Distributed Energy Systems: A Systematic Review

Author

Listed:
  • Kimia Honari

    (Department of Electrical and Computer Engineering, University of Alberta, Edmonton, AB T6G 2R3, Canada)

  • Sara Rouhani

    (Department of Computer Science, University of Manitoba, Winnipeg, MB R3T 2N2, Canada)

  • Nida E. Falak

    (Department of Electrical and Computer Engineering, University of Alberta, Edmonton, AB T6G 2R3, Canada)

  • Yuan Liu

    (Department of Electrical and Computer Engineering, University of Alberta, Edmonton, AB T6G 2R3, Canada)

  • Yunwei Li

    (Department of Electrical and Computer Engineering, University of Alberta, Edmonton, AB T6G 2R3, Canada)

  • Hao Liang

    (Department of Electrical and Computer Engineering, University of Alberta, Edmonton, AB T6G 2R3, Canada)

  • Scott Dick

    (Department of Electrical and Computer Engineering, University of Alberta, Edmonton, AB T6G 2R3, Canada)

  • James Miller

    (Department of Electrical and Computer Engineering, University of Alberta, Edmonton, AB T6G 2R3, Canada)

Abstract

Blockchain technology and, in particular, smart contracts based on it, offers a new, decentralized mechanism for entering into and fulfilling contracts in diverse markets. Energy markets are no exception, and indeed, the decentralized nature of the blockchain may be particularly important for them as the penetration of residential prosumers offering microgeneration to the grid grows. At this time, however, the literature on smart contracts in energy markets—and particularly their interaction with the technical infrastructure of the smart grid—is limited and scattered. There is a need to consolidate these studies into a comprehensive understanding of the state-of-the-art in smart contract design for the smart grid. However, no existing reviews focus on smart contracts in energy systems. The scope of our study is the role of smart contracts in energy systems and what limitations they encounter. We conduct a systematic review of this topic, focusing on systems that have been implemented as prototypes. These studies provide key evidence on the scalability of smart contracts for energy systems and their interaction with the technical elements of the smart grid. We selected a pool of 76 papers meeting our criteria, with three others excluded for misinterpreting fundamental aspects of blockchains and smart contracts. After reviewing each paper, we found that this literature falls into four categories: market operations, ancillary services, auditing and monitoring, and cybersecurity. We then identify and examine the cross-cutting concerns of data storage in and interoperability between blockchains. We finally discuss the implications of our findings for future research. In particular, there is likely to be a complex interplay between the data generated and stored via the blockchain versus the data required to meet energy system reliability targets and market obligations for participants.

Suggested Citation

  • Kimia Honari & Sara Rouhani & Nida E. Falak & Yuan Liu & Yunwei Li & Hao Liang & Scott Dick & James Miller, 2023. "Smart Contract Design in Distributed Energy Systems: A Systematic Review," Energies, MDPI, vol. 16(12), pages 1-28, June.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:12:p:4797-:d:1174383
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    References listed on IDEAS

    as
    1. Han, Dong & Zhang, Chengzhenghao & Ping, Jian & Yan, Zheng, 2020. "Smart contract architecture for decentralized energy trading and management based on blockchains," Energy, Elsevier, vol. 199(C).
    2. Lee Thomas & Yue Zhou & Chao Long & Jianzhong Wu & Nick Jenkins, 2019. "A general form of smart contract for decentralized energy systems management," Nature Energy, Nature, vol. 4(2), pages 140-149, February.
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