Blockchain technology – an opportunity for the energy transition

At the end of January a virtual kick-off meeting was held for the research project "BEST - Blockchain-based decentralized energy market design and management structures". fortiss and its consortium partners are conducting research into how the blockchain technology can best be implemented for energy trading within the framework of the energy transition. The consortium project, which is scheduled to run for three years and includes participants from the research and the energy industry is being funded by the German Federal Ministry for Economic Affairs and Energy. Represented by the Human-centered Engineering field of competence, among other activities fortiss is developing a personalised prognosis model for future energy consumption through the utilization of machine learning (ML) technology.
fortiss Projekt BEST
Dr. Yuanting Liu puts the consumer at the centre of her research.

Blockchain technology can essentially be used for any kind of transaction, including energy trading.  Transactions are combined in blocks and furnished with a unique signature, which results in a decentralized control system that does not require authorities such as banks or brokers. Blockchain technology makes it possible for electricity providers and consumers to trade directly. The entire energy system benefits from this approach since it can respond in a much more flexible manner to fluctuations. That means blockchain supports the decentralized approach of the energy transition and can help drive down the demand for compensation measures such as storage or grid expansion.

Key technologies supply impulses for the energy market

In the conventional system, power utilities buy and sell electricity for every quarter of an hour. If shortages occur or if supply and demand are unbalanced, transmission system operators compensate with operating reserves, meaning power plants are ramped up or down on short notice, pumped storage plants are switched on or large consumers are disconnected from the grid.

As a result of the ongoing energy transition, power generation is becoming increasingly decentralized and volatile and can lead to significant local fluctuations. Where possible, energy should be used directly where it is generated – and above all when it is available. To achieve this, consumers first need intelligent electricity meters, so-called smart meters, which measure and communicate electricity consumption at close intervals. Secondly, they need local electricity markets where surpluses and shortages can be automatically balanced. This would relieve the overall strain on the grid. The BEST project is developing an electricity market bidding system (EMBS) based on blockchain technology that will support the deployment of this local trading approach during the energy transition.

Direct from the fortiss lab to pilot testing

The Reiner Lemoine Institute, which is also coordinating the BEST consortium, is initially gathering the EMBS requirements, after which it will create a concept as a basis for developing the software. fortiss, along with OLI Systems GmbH and the Fraunhofer Institute for Open Communication Systems FOKUS, is participating in the programming of this software. fortiss researcher Dr. Yuanting Liu is focusing on areas such as the development of multiple interrelated subsystems for the EMBS. "A Blockchain-based electricity market bidding system should be usable and acceptable for electricity trading. For this, it is important to explore how users can be meaningfully involved in the decentralised management of the blockchain? What are the advantages of such a system for the actors involved in such a system? How can user interaction with such an electricity market design be implemented so that convenience benefits arise and at the same time the understanding of the processes in the electricity grid is strengthened," explains the fortiss scientist.

One research focus is therefore the improvement of forecasts, which play an extremely important role for both electricity consumption and consumer behavior. To ensure optimal planning and resource management, electricity consumption should be determined for a specific period of time. The prognosis model, which will be developed on the basis of a time series analysis and through the use of machine learning (ML), will be designed to forecast consumption in support of electricity demand and planning. fortiss is also developing an interactive and collaborative pooling platform as a foundation for examining how to automatically derive user profiles from consumer behavior. 

At the conclusion of the concept stage, the prototype phase will be used to initially test the basic functions of the EMBS in a virtual environment. The EMBS and the pooling platform will then be connected to real technical systems, consumers and electricity suppliers in the fortiss lab environment, where additional testing will occur. At the end of the development phase, the system will be deployed in the e-regio service area west of Bonn, Germany, where customers will test the system under real conditions. In parallel, the research institute Energieforen Leipzig GmbH will lead a knowledge transfer project with the energy sector, while the University of Applied Sciences Weserbergland (HSW) undertakes an analysis of the legal aspects of the EMBS.

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