P2P Local Energy Trading on Blockchain Eralp Bayraktar Advisor(s): - - PowerPoint PPT Presentation

Chair of Network Architectures and Services Department of Informatics Technical University of Munich

P2P Local Energy Trading on Blockchain

Eralp Bayraktar Advisor(s): Dr. Marc-Oliver Pahl Supervisor: Prof. Dr.-Ing. Georg Carle Technical University of Munich (TUM) Department of Informatics Chair of Network Architectures and Services Garching, 24.10.2017

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Motivation

by Solar Choice

Batteries? Selling back to state? 13ct/kWh Selling to your neighbour? 29ct/kWh

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Goal

Letting people/entities trade local energy amongst each other with low fees and without the need of trust.

Buyers => minimize their energy bills Sellers => profit by selling All => less stress on main grid, greener energy, cheaper electricity*

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Street Model (Microgrid)

I want to SELL 2 kwh for 20 ct/kwh I want to BUY 1 kwh for 20 ct/kwh

Grid-connected PV System Datasheet https://goo.gl/hKqL3C

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Advantages of Blockchain

• Immutable (in transactions)
• No need for a central authority
• Very high redundancy
• Secured by public/private keys and digital signatures
• Accountability

Shortcomings of Blockchains

• Low throughput capacity (i.e. Bitcoin only 7 transactions per second)
• Long transaction times (10 minutes for Bitcoin)
• More information inherently public

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Advantages of Blockchain in Local Energy Trading

• Automation of trading processes (self executing smart contracts)
• Cost efficient enabling of trading of energy even from small

prosumers and consumers

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Components

1) Logging

2) Marketplace (Supply - Demand Matching)

3) Payment

Who sent whom, when, what

Non disputable, fast, low-fee, verifiable payment channel

No central authority, transparent, trustable

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Underlying Market Comparison

[1]: Y. Wang, W. Saad, Z. Han, H. Poor, T. Basar ; A Game-Theoretic Approach to Energy Trading in the Smart Grid [2]: N. Yaagoubi, H. Mouftah; Energy Trading in the Smart Grid: A Distributed Game-Theoretic Approach [3]: N. Rotering, M. Ilic ;Optimal charge control of plug-in hybrid electric vehicles in deregulated electricity markets.

[1] proposes a double auction mechanism that is proved to have a Nash Equilibrium, is truthful and strategy-proof. The results are 90-100% close to the global optimal solution. [2]: Extension of [1], it also considers the transmission costs and the physical smart grid graph. Proposes both a centralized and a distributed game-theoretic approach. [3]: Focuses on Vehicle-to-Grid energy selling to profit vehicle owners, uses dynamic programming

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Double Auction

Good for multiple buyers and multiple sellers.

BUY BOOK SELL BOOK 2 kWh @ 16 ct/kWh 3 kWh @ 17 ct/kWh 6 kWh @ 14 ct/kWh 20 kWh @ 18 ct/kWh 3 kWh @ 12 ct/kWh BUY BOOK SELL BOOK 2 kWh @ 16 ct/kWh 2 kWh @ 15 ct/kWh 6 kWh @ 14 ct/kWh 3 kWh @ 17 ct/kWh 3 kWh @ 12 ct/kWh 20 kWh @ 18 ct/kWh

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Security Concerns [1]

1) Impersonation 2) Data Manipulation 3) Eavesdropping 4) Privacy Breaches 5) Disputes 6) Denial-of-Service

[1] Mustafa A. Mustafa, Sara Cleemput, and Aysajan Abidin, A Local Electricity Trading Market: Security Analysis [2] E. L. Quinn, “Privacy and the new energy infrastructure,” in Social Science Research Network (SSRN), pp. 1-41, Feb. 2009.

Such data is closely correlated to users’ consumption data/patterns which have been shown to be a privacy concern for users [2]

1 Eralp Bayraktar | P2P Local Energy Sharing on Blockchain Blockchain Founded Function Custom Proof-of-Stake* 2016, Australia Local Energy Trading, also Smart Utility Services Custom Blockchain 2016, USA Local Energy Trading Public Ethereum 2016, Germany Sharing economy of electrical vehicle charging stations

Related Work

What are they doing good? What is missing?

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Agenda

Motivation Analysis Related Work

• - Design

Evaluation Conclusion

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Design

Public Ethereum Blockchain

Market Smart Contract Logging Smart Contract 1) Prosumer produces excess energy 2) Puts SELL order to the Market SC 3) Consumer puts BUY order to the Market SC 4) Orders Match -> Event Published 5) Prosumer receives the event and feeds energy into the smart grid and logs this into the Logging SC 6) Consumer pays the amount

2 3 4 4 4 5 5

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Evaluation

• Quantitative
• Different scenarios are emulated and the required number of transactions as well

as the computing power is captured.

• Scenario parameters
• Solar irradiance (N - W - S - E of Germany)
• Number of peers (10-100)
• Type of peers (0%-10% industrial)
• Qualitative
• How well blockchain is suited for this kind of marketplaces?
• Do shortcomings play a big role?
• Are the advantages worth it?

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Conclusion

• One of the first works bringing peer-to-peer marketplaces and

blockchain together

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Questions?

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Classification of Blockchains

Permissions

Public Consortium Private

Consensus Types

Proof-of-Work Proof-of-Stake Proof-of-Authority

Most common: Public and Proof-of-Work (Bitcoin, Ethereum, Monero etc.)

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Smart contracts

Smart contracts are like Vending/Ticket Machines.

There are limited entry points, and you know what will happen when you put money in and press 46.

Ethereum smart contracts

• Coded in Turing-complete Solidity language (js-like)
• Immutable
• Open source by definition

In case of a bug? Trust?