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Energy is the basic prerequisite of any industry, but global warming, climate change, and pollution are increasing due to digitization and industrialization. Rising electricity demand, combined with the integration of electric vehicles, has made it increasingly challenging to rely solely on conventional centralized power systems. To meet this current changing energy scenario, it becomes essential to introduce green energy into conventional power systems and allow bi-directional energy flow. Microgrids, smart grids, and virtual power plants will play an important role in making this massive shift from a centralized system to a decentralized power system. A virtual power plant is a cloud-based energy system incorporating various microgrids, energy storage, distributed energy resources, and weather forecasting. Since this system is virtual, it could lead to cyber threats. To the best of the authors’ knowledge, this review article complies with recent data from ten major research libraries, offering consolidated insights into the virtual power plant (VPP) framework that will enhance customer participation and encourage them to become prosumers. Additionally, a blockchain-based VPP framework is presented along with two very prominent scenarios of blockchain-based distributed VPP involving P2P transactions and NW trading discussed for building futuristic NZEGs aimed at reducing carbon footprints and providing a foundation for future net-zero energy grids (NZEZs).
Article Highlights
Issues to ever rising electricity demand, which has necessitated a shift towards sustainable energy solutions.
Surmounting these challenges, microgrids, smart grids, augmented with virtual power plants (VPPs) are gaining prominence as significant components of a decentralized power system.
In accession, a detailed insight is provided based on Blockchain enabled VPP for security and Energy management, various frameworks encouraging the minimisation of Carbon foot print of nation through Net zero Energy grids.
Introduction
The 19th century witnessed the explosion of massive globalization and industrialization. This gives rise to many global problems such as pollution, climate change, global warming etc. To circumvent this, researchers and scientists are emphasizing generating more clean and green energy by integrating renewable energy technology into conventional power systems which has created a new paradigm for electrical energy. According to government data, India’s goal to achieve: [1]
500 GW of installed non-fossil energy capacity by 2030.
50% of energy from renewable by 2030.
A reduction in carbon emissions by 1 billion tonnes by 2030.
The emissions intensity of India’s economy to fall by 45% by 2030.
India will be net-zero by 2070”.
So it is very essential to include renewable energy sources like wind and solar to reduce dependencies on fossil fuel-based generation [4]. Moreover, as the world is moving towards green mobility through electric vehicles [5], it is indispensable to make a system like a VPP that will handle electric vehicles’ charging-discharging patterns based on grid peak or off-peak hours or available green power to the nearby connected microgrid or smart grid [6, 7]. For the setting up of VPP, more renewable energy sources must be introduced into the existing system. It is crucial to identify measures to prevent renewable energy curtailment [8, 9] by adopting advanced energy storage technologies [10], implementing smart grid infrastructure [11], and promoting demand response strategies to improve demand-side management [12].
Paper organization and research methodology
The objective of this study is to provide an in-depth understanding of VPP and blockchain technology in the energy sector. It primarily focuses on recent articles published between 2018-2024, while also incorporating pioneer work from 2009-2016 which highlights early VPP pilot projects implemented during this period. Figure 1 provides a visual view of all the research articles used in this study.
Fig. 1 [Images not available. See PDF.]
Database comparison of research article in this study
For collecting data, this research article utilized ten major research libraries, namely Elsevier, In-proceedings, MDPI, IEEE, Wiley online library, Online references, Springer, Nature Publishing Group UK London, Francis & Taylor, and a variety of other major publications. Figure 2 provides a critical view of research publications based on the published year used in this study.
Fig. 2 [Images not available. See PDF.]
Yearly database comparison of research articles in this study
Table 1 succinctly highlights the VPP-related work by various researchers and identifies the existing research gap.
Table 1. Summary of VPP Framework and Research findings
S.No. | Ref. No. | Analysis of the paper | Research gap |
|---|---|---|---|
1 | [13] | Superiority of VPP over microgrid explained and also how VPP can control real-time energy market. | Link between DER and VPP is missing. |
2 | [14] | VPP improve scheduling of DERs . | Security of the VPP is a huge risk |
3 | [15, 16–17] | Transition from microgrid to VPP. | No generalize framework |
4 | [18, 19] | Uncertainties of VPP and their associated problems are addressed | System stability and reliability will be a challenge. |
5 | [20, 21] | Controlling of DERs in real-time and demand response through bottom-up approach. | Lack of framework of smart energy management system. |
6 | [22, 23, 24–25] | Carbon-emission reduction models using microgrid. | Multi-directional power flow is a challenge to handle in VPP system. |
7 | [26, 27] | Optimization algorithm for reducing carbon emission. | Lack of optimal energy management |
8 | [28] | Smart grid based VPP model. | Integration of different DERs into the smart grid is a major challenge. |
9 | [29, 30] | Performance of VPP directly related to number of acting DERs | Making independent Decision making VPP is a challenge. |
10 | [31, 32–33] | Peer-to-peer energy trading using VPP | Lack of customer friendly mechanism |
11 | [34, 35–36] | EVs integration using VPP and demand response. | Load pattern, customer behavior |
12 | [37, 38–39] | Blockchain-based smart grid and VPP . | Building customer trust in P2P is a big challenge. |
The remainder of this study is structured into six main sections. Section 2 presents the problem formulation of this study. Section 3 outlines the solution to solve existing power systems problems. Section 4 presented a framework for NZEZs based on VPP and blockchain technology. Section 5 highlighted future scope, while Sect. 6 presented the conclusion for this study.
Problem formulation
There are numerous challenges in the integration of renewable energy into the current power systems, such as:
The unpredictability and uncertain nature of RESs give rise to power imbalance and stability-related issues in the power system.
The rise of electrical vehicles (EVs) has made it extremely challenging to control and manage traditional power flow models due to their unidirectional and centralized nature.
The major problem of the current scenario is renewable energy curtailment; excess generation from RES during favorable weather conditions will be unutilized due to the lack of smart infrastructure like demand response management and large storage mechanisms.
Solution to solve existing power system problems
Bottom-up approach
Traditional or centralized power systems with a top-down approach adopted unidirectional power flow [40]. However, due to the extensive penetration of inexhaustible energy in modern power systems, the power flow is either bidirectional or sometimes multidirectional [41]. To effectively control such systems, the bottom-up approach is essential. MGs, SGs, and VPPs are the main pillars of such systems [42]. An MG is a group of DERs such as solar panels, windmills, EVs, battery storage devices [43], and interconnected loads that can act as a smartly controlled single entity connecting to the main grid [44]. It can be operated either in grid-connected or in islanded mode. An SG is not a new technology but a combination of various new, emerging, and advanced technologies such as IoT devices, sensors, communication devices, DERs etc. For simplicity, an SG can be explained as IT + existing grid = SG [45]. VPP will be an essential element of SG, which will mainly operate on bidirectional power and information flow. For a smooth integration of renewable energy, it is required to move from centralized control of power to decentralized control, from a one-way power flow (CPP) to a bi-directional power flow (VPP), and from a top-down approach to a bottom-up approach (VPP) [46].
VPP as energy management
A VPP manages energy by aggregating DERs, balancing supply and demand, providing grid ancillary services, facilitating P2P trading and NW trading, optimizing energy distribution, and, above all, providing grid support [47]. VPP should always be connected to the grid because its ultimate goal is to provide grid support and reduce the peak hour burden on the grid [48]. Such a scenario is only possible through advanced sensors, IoT data, and communication networks. For implementing VPP, smart meters, aggregators, renewable energy sources like solar, wind, fuel cells, bio-gas and battery storage, and electric vehicles are some of the essential entities [49]. VPP also requires hardware supports like advanced converters like buck/boost converters, grid-side converters, rectifiers, and other hardware setups; specialized software; and dedicated communication links.
VPP is like a smart control energy generation and management system that can provide a bi-directional flow of power and information. So VPP can be thought of as a cloud of power that can not be seen physically but is statically made using advanced information and communication technologies to balance power or energy flow[50]. VPP was first introduced by Dr. Shimon in 1977 as a virtual utility[51]. To make energy flow seamless and dynamic, VPP can be thought of as the Internet of Energy (IOE), which is a cloud-based software that is essentially a combination of a weather forecasting system, an energy market regulator, various renewable energy sources or DERs, energy storage (electric vehicles or battery), information and communication technologies (ICT), the Internet of Things (IoT), various sensors and field monitoring devices, smart metering devices like smart meters, advance metering infrastructures (AMIs), consumer’s schedulable or non-schedulable loads, often called critical or non-critical loads and most importantly, prosumers (who can generate their green energy) [52]. Based on these critical and non-critical loads, VPP supports NW trading, meaning consumers and prosumers will get attractive incentives if they contribute to peak hour savings by shifting their non-critical loads to off-peak time [53]. This way VPP can build trust between customers and attract more consumers to become prosumers. Moreover, it also provides a framework so that consumers or prosumers can exchange their energy locally or from one community to another community nearby. This is called P2P energy trading, which emphasizes setting up a clean green corridor for energy trading. A simple layout of VPP is shown in Fig. 3.
Fig. 3 [Images not available. See PDF.]
Layout of virtual power plant
Benefit of VPP
VPP can provide many technological and financial benefits, some of which are as follows:
Due to its virtual nature, it allows utilization of the locally generated energy without the need for a new generation plant [54].
VPP can be synchronized with any independent generator to effectively shave the peak demand and also enhance independent capacity based on forecasted demand [55].
VPP will also help to minimize the overall losses of the system by optimizing the distribution of locally generated power from renewable energy sources and eliminating long-distance transmission [56].
VPP will provide ancillary support such as smart controlling and monitoring of active and reactive power and frequency regulation to maintain the grid stability and also enhance the system security [57].
Based on real-time demand response, proper demand-side management (DSM) methods can be implemented with the added advantage of flexible electricity to the consumers for active load management [58].
As E-mobility will be the future, and in a very short period, the number of electric vehicles will increase drastically, then VPP will be the only solution for reducing the grid burden by incorporating EVs into Vehicle to Grid (V2G) mode.
Features of VPP
Flatten the load curve With the help of energy-saving technologies such as DR or demand response and weather forecasting instruments, VPP will help to save the peak demand as well as balance power supply and demand by scheduling the customers’ critical and non-critical loads [59].
Reducing carbon capture VPP is a combination of smart MGs and SGs that promote the generation of green energy at the local level, and this way gradually reduces carbon footprint by reducing the use of conventional fossil fuels such as coal, gas,etc., and gradually decreasing pollution too and provides a way to protect the environment [60].
Reduce renewable energy curtailment VPP increases the predictability through demand response and advanced weather forecast and thus it can effectively soothe the variability of renewable power generation [61]. During high demand, VPP tries to ramp up generation while in low demand this generating energy tries to charge up the energy storages [62]. This way it tries to provide power output according to the grid and reduces the need for green energy curtailment [63].
Promote P2P energy trading VPP can set up a new and modernized era of energy trading [64], so that individuals can take maximum benefits from it by becoming producers of green energy and provide a framework for P2P energy trading that will promote the use of renewable energy at the local level [65]. This significantly promotes P2P energy trading rather than peer-to-grid (P2G). Further, it can attract more consumers to become prosumers. PP2P energy trading can effectively reduce costly network upgrades [66]. For a better understanding, VPP features can be summarized pictorially in Fig. 4.
Fig. 4 [Images not available. See PDF.]
VPP features
Enhance maximum participation VPP can provide attractive incentives to customers, especially for active participants [67]. It can enhance relations between the utility and customers through various profitable collaborative programs if customers adjust the energy usage based on the grid scenario, then the utility will provide attractive benefits.
Grid support With the implementation of VPP, power consumers can become active participants in the power system [68]. Since the world is now moving towards green e-mobility, VPP can reduce the upcoming grid burden of EVs by strategically charging EVs through extra generated green energy during off-peak times with comparatively cheaper electricity and can effectively utilize EVs store energies to the grid (V2G) in the peak times to reduce the grid burden. This way VPP can be thought of as a Smart Energy Management system [69].
Enhances efficiency of micro-generation unit VPP manages and controls various small green energy generating units such as rooftop solars, small windmills, bio-gas etc into one single dispatchable entity [70]. Smart grid along with VPP will facilitate channelizing controlled power flow from many small-sized green energy generation sources as well as plug-and-play of various energy storage systems [71]. It can provide income benefits to all underlined participated customers/prosumers, provide energy security, prevent blackout conditions and ultimately reduce grid burden [72, 73].
Foundation of futuristic Net-Zero Energy Grids VPP empowers communities or prosumers to become self-sufficient in energy needs, eliminating long-distance transmission through P2P [74, 75], optimizing energy uses in real-time through smart energy management software and Predictive grid management through a data-driven approach like NW trading [76]. This will help in emission reduction and emission removal through renewable energy and will lay a foundation for NZEGs to meet the target of net-zero 2070 [77, 78]..
Types of VPP
There are two types of VPP found in literature namely commercial VPP (CVPP) and Technical VPP (TVPP). Commercial VPP The main objective of commercial VPP or CVPP is to promote distributed energy resources on a commercial level in the existing power system, allowing bidirectional power flow in all commercial buildings, government buildings, and other household consumers to become prosumers and active participants in the electricity energy trading market. Such kind of VPP can include participants from various locations. CVPPs work based on mutual agreement with all the participants and DERS and ensure maximum profit for all participants by buying or selling energy in the energy markets.
Where as Technical VPP Technical VPP (TVPP) operates from the same locations means it aggregates DERs from the same geographical region [79]. Its main function is to deal mainly with optimizing and controlling complex calculations related to storage allocation and other technical applications. It also deals with various faults and losses in the system, monitoring economic challenges [80].
The CVPPs provide necessary information to the TVPP, such as information regarding schedulable and un-schedulable loads, the maximum capacity of each and individual DER unit, their respective location and related capacity of energy storage units, demand-supply and weather forecasts, and the optimal control strategy of all the controlled loads throughout the data [81]. For a better understanding, VPP operation in terms of CVPP and TVPP can be explained in diagram matically in Fig. 5.
Fig. 5 [Images not available. See PDF.]
Working of TVPP and CVPP
VPP challenges
This study broadly classifies VPP’s drawbacks into three categories:
cyberattacks VPPs are prone to cyber-attacks [82] because VPPs rely heavily on Information and communication systems, critical sensor data, and data collection. It is easy for an adversary to penetrate the system and perform some malicious intentions. [83]. Vulnerability can also arise from interconnected devices, outdated software, and insufficient security measures, potentially leading to energy supply disruption and financial losses.
System complexity The second challenge associated with VPPs is the potential impact of large amounts of DERs on local voltage [84]. To counter such issues, an energy management system that is user-friendly and enhances user trust while providing immutability is essential [85, 86].
Regulatory obligations In the absence of clear policies and regulations, its is very difficult to set-up a standard VPP framework [87]. Moreover, it is crucial to provide incentives and support to participants to maximize VPP operation and benefits in the system [88].
VPP Project across the globe
The first-ever project of VPP was the FENIX project, completed in 2009, followed by EDISON (2012), Web2 Energy (2015), Powershift (2015), and Smartpool, also completed in 2015. POSTIFY (2021), UPERC, and APERC (2022) are the most recent VPP projects across the globe. In Table 2, this article presents brief findings of all the VPP pilot projects implemented across the globe as per the release of this article:
Table 2. Implemented VPP projects
S.No | Ref | Country and Year | Project Name | Project Summary |
|---|---|---|---|---|
1 | [89] | UK, Spain, France [2005-2009] | FENIX | The motto of this project was to implement VPP and maximize the integration of DERs to support decentralized management. |
2 | [90, 91–92] | Denmark [2009-2012] | EDISON | This project aimed to implement VPP to establish a smart energy management system for charging and discharging electric vehicles and support high penetration of wind energy. |
3 | [93, 94–95] | Canada [2010-2015] | POWER SHIFT | This project aimed to implement VPP that allows weather forecasting, demand control, and effective integration of wind energy. |
4 | [96] | Germany [2010-2015] | WEB2 ENERGY | This project aimed to install smart meters through which smart distribution is implemented by effective energy management and automation. |
5 | [97] | German company “Next Kraftwerke” [2015] | SMART POOL | They developed a VPP which gave flexibility to energy producers and consumers. They also provided solutions and control to power fluctuations. |
6 | [98, 99, 100, 101–102] | China [2016] | SHANGHAI HUANGPU | They developed a distributed VPP that helps in managing energy storage and allows smart energy management in commercial buildings. |
7 | [103] | USA [2018-2020] | EDISON | They developed a resilient distribution system based on a photovoltaic system that included storage in commercial buildings. |
8 | [104, 105–106] | Australia [2018] | AGL-VPP | It was a prototype that included energy storage for 1000 residential homes. They used cloud-based technology. In the later phase, many Australian companies collectively made a real-time monitoring VPP. |
9 | [107, 108] | Australia [2019] | SIMPLY ENERGY-VPP | This project aimed to manage ancillary services through VPP. |
10 | [109] | Spain, France, Switzerland, Germany [2021] | POSITYF | The aim of this project was the development of a dynamic VPP entirely based on renewable energy. |
11 | [110] | India [2018-2022] | APERC, CERC, UPERC | This project aimed to create a VPP to provide ancillary services, improve scheduling and management of renewable sources, enhance the metering framework, and promote P2P energy transactions. |
Decentralized control of electrical energy using blockchain technology
Blockchain is an emerging technology of the modern era that enables secure, decentralized, transparent, and immutable energy transactions, ensuring real-time verification of energy flows, facilitating energy trading and auction mechanisms, and providing a bidding platform [111]. With the help of blockchain and smart contracts, a new era of energy trading will be developed that will It is an immutable, shared, distributed database system that uses a peer network of nodes to facilitate decentralization [112]. Thus, it helps to build trust between the participants [113].
Blockchain technology ensures secure energy transactions by requiring all network participants, termed as nodes, to verify proposed transactions. Once the verification process is done, then only the transaction is added to the block and subsequently added to the main chain.
Key Technologies of blockchain
Smart contract Smart contracts are computer codes or pre-written agreements where the actual logic is written in a specialized high-level language like Solidity. It will bring an additional layer of functionality that is append-only, i.e., once data is added, it can’t be deleted or changed. The new information is added in the form of blocks over the blockchain and the blockchain will eliminate the need for any middleman or intermediaries to carry out any mutual agreement between the communicating parties [114]. These smart contracts in the blockchain will record the energy transaction, and based on this, a dedicated hash value is created. Therefore, information about energy transactions is contained in a block and connected to previous blocks to form a chain of blocks. Blockchain heavily relies on the hash function, which is an alphanumeric string. A hash function can take input data of any size and will produce only fixed-size output that will be called the hash value. Blockchain mainly uses SHA256 because it makes a fixed size of 256-bit hash value [115]. It is considered to be one of the most computationally secure, as it can prevent many cryptographic attacks. The linking of blocks makes it almost impossible to do any tampering of data in a blockchain, which simply means the original message can’t be traced from the hash value and hence it will become very complicated to alter the energy transactions that once were recorded in the blockchain [116]. Figure 6 shows how transactions are performed in blockchain.
Fig. 6 [Images not available. See PDF.]
Blockchain transaction working
Consensus mechanism The consensus mechanism defines the rules, regulations and protocols for the blockchain process. Through the consensus algorithm, a node in the distributed network agrees on the validity of a transaction and if every node provides consensus on the same transactions, then that transaction is accepted and finally added to the blockchain in the form of a valid block. The blockchain can be permissioned or permissionless as per the requirement [117]. Table 3 shows VPP implementation using public/private blockchain technology. The common consensus algorithm for permissioned blockchain includes Proof of Authority (PoA) [118], Replicated and Fault Tolerant (RAFT), Practical Byzantine Fault Tolerance (PBFT), and BFT [119]. Whereas permissionless blockchain network uses proof of work (PoW) [120], proof of stake (PoS) delegated proof of stake (DPoS), byzantine fault tolerance (BFT), etc [121].
Table 3. Implementation of VPP using Blockchain Technology
Ref | Algorithm/Platform | Highlight | Application | Research outcome |
|---|---|---|---|---|
[122] | Hyperledger Token-based financial transactions having an interoperability cross-industry blockchain. (Linux and IBM) | Development of a cyber-physical platform where each small and big entity or prosumer can sell or buy electricity. | Ancillary services and local energy markets (LEM) managed by VPP. | Token-based financial transactions having an interoperability cross-industry blockchain. |
[123] | UK REFIT dataset | Main chain and side chain are used for privacy protection and revenue distribution. | Blockchain-based VPP structure to implement demand response transactions for reduction of electricity bill. | Sorting generic algorithm is used. |
[124] | Ethereum & hyperledger fabric | Ethereum network used for creating a smart contract in VPP energy transaction and hyperledger for obtaining chain code for mobile-based app | Implemented P2P electrical energy trading system | API based P2P transactions with WebUI Interactions. |
[125] | Ethereum Blockchain | Execution of smart contact based on VPP and auction is operated by a smart contract. | P2P bidding and energy trading platform built. | Ropsten Test Network is used for Ethereum Virtual Machine. |
[126] | Algorand | A Green Protocol, Pure Proof of Stake (PPoS) used that provide high scalability and secure decentralization. | Blockchain-based public key system for authentication of IoT devices in electrical systems. | Used protocol MQTT - Message Queue Telemetry Transport using Transport Layer Protocol (TLS). |
[127] | Ethereum | Best for tracking of products along with data security and low transaction cost. | Blockchain-based supply chain management system healthcareare | Using Proof of Authority (PoA) consensus algorithm and suited for private blockchain. |
[128] | Hyperledger Fabric | Fabric-based private blockchain Demonstrate best transaction performance result than Ethereum Public blockchain. | Demonstrated best result for Smart Grid application as in it, peers are divided into three Category-Endorser peer, Orderer peer and committed peer and all of them worked in pipeline manner for speedup transactions. | Multi-version concurrency control (MVCC) is used for synchronization of transactions. |
Encryption algorithms Encryption algorithms in the blockchain, generally use asymmetric algorithms [129]. Such encryption algorithms use two separate keys, one for encryption and the other one for decryption. Such keys are called “Public key” cryptography. RSA (Rivest-Shamir-Adleman) and ECC (Elliptic curve cryptography) are examples of such algorithms [130]. Among them RSA is one of the oldest ones which works on the mathematical modeling of large prime numbers and is mostly used in communication channels, digital signatures, securing emails and key exchanges. On the other hand, ECC is a modern cryptography technique that works bimplementation ifased on the algebraic structure of elliptic curves [131]. There is another form of encryption algorithm called symmetric algorithm which uses only a single key for encryption as well as decryption. AES and DES are examples of such algorithms.
Distributed data storage A distributed data storage blockchain is a database of transactions continually updated and shared across many nodes or computers in a network [132]. Each participating node is unique and has complete and independent data storage [133]. A distributed database, essentially a decentralized system, allows very quick processing and formatting of data but it also suffers from reliability [134]. Interplanetary File System (IPFS) is an example of such distributed data storage [135].
Application of blockchain technology in electrical power system
Blockchain has vast potential across various industries due to its security [136]. It enables secure supply chain tracking, streamlines financial transactions with reduced intermediaries, supports decentralized energy markets like VPPs, and ensures data integrity in healthcare[137] are names of a few.
This paper mainly explains blockchain use cases in the energy sector [138]. Based on Fig. 3.3.2, it can be stated that blockchain technology is best suited for a decentralized generation which will enhance electricity trading [139, 140]. In this way electric grid will be more likely to work in peer-to-peer networks. Blockchain can also help to keep track of all carbon emissions and renewable generation [141].
Blockchain not only provides token-based secure payments but can be used to provide verifiable digital credentials or Identity management to the dedicated nodes [142]. Moreover, it can also be used to generate secured automated billing. Fig provides a critical view of blockchain technology in the energy sector Fig. 7.
Fig. 7 [Images not available. See PDF.]
Blockchain uses cases in energy sector
Drawback of blockchain technology
Although blockchain provides many benefits but excessive energy consumption and scalability issues are the major concerns of this innovative technology [143]. Table 4 provides a detailed overview of blockchain technology energy consumption depending upon various consensus algorithms. It can be identified that Algorand, Energy Web and Polkadot are some innovative and sustainable blockchain technologies but they are in their initial phase [144]. As Blockchain technology works in Public blockchain and private blockchain, there may be a privacy issue in the public blockchain [145]. More dedicated research is required to explore energy blockchain further using different consensus algorithms.
Table 4. Energy Consumption in various Blockchain based on consensus
Blockchain Technology | Consensus | Energy Consumption (Kwh) |
|---|---|---|
Bitcoin[146] | Proof of Work (PoW) | 89,780,000,000 |
Ethereum[147] | Earlier PoW, now using more energy efficient consensus Proof of stake (PoS) | 17,300,000,000 |
Algorand[148] | Pure Proof of Stake (PPoS) | 512,671 |
Hyperledger[149] | Practical Byzantine Fault Tolerance (PBFT) or PoS | Not exact figure much efficient than Bitcoin |
Energy Web (Ethereum-based blockchain specially designed for the energy sector)[150] | Proof of Authority (PoA) | Not exact figure but much efficient than Bitcoin |
Polkadot[151] | PoS | 70,237 |
Blockchain based VPP model
A VPP-based modern power system refers to the contemporary and advanced electrical grid infrastructure [152]. Fig. 8 shows how VPP with blockchain technology can effectively manage all underlined DERs using smart contracts in modern power systems.
Fig. 8 [Images not available. See PDF.]
Smart control of DERs by VPP using blockchain technology
Such smart system incorporates various technologies and strategies to enhance efficiency [153], reliability, and sustainability in the generation [154], distribution, and consumption of electricity [155]. There are five Inter-operative layers of smart grid architecture with their respective domains and zones [156], starting from generation to consumption [157]. The bottom-up approach is fundamental to establishing a VPP, enabling the extensive integration of diverse DERs like solar, wind etc [158]. With the help of VPP, aggregators, and demand response, it is possible to integrate small and medium prosumers into the electricity market efficiently where they will be able to communicate effectively with the grid operator, VPP operator or independent system operator and also with all the distributed energy resources [159]. In this entire set-up smart meter as well communication system plays a vital role. Due to all these communications and connections, the system will become very complex, so it is paramount to have secure, transparent tracking of all the resources at every layer [160]. Blockchain-based smart contracts will be an innovative emerging technology in the energy sector to build trust between participants, ease out DER penetration and also it will open a new door for real-time energy trading. Fig. 9 shows the five-layer architecture of SG with blockchain technology.
Fig. 9 [Images not available. See PDF.]
Five layer architecture of various smart grid entity
Frame-work for NZEGs based on VPP and blockchain technology
To facilitate modern power systems towards full digitization and automation with cyber-security and make them more translucent, this study highlights a blockchain-based distributed VPP model. Once established, this model will help to reduce the carbon footprint by promoting local energy transfer between the peers and will emphasize demand response to enhance smart energy management and reduce peak power reduction. With the help of blockchain-assisted VPP, participants can get attractive incentives from DSO or utility by modifying their critical and non-critical loads and contributing to stabilizing grid peak demand. It is to be noted that for such kind of setup, a strong communication network is needed. This study assumed that all the participating buildings in this framework are grid-interactive energy-efficient buildings (GEEB). Based on a smart weather forecast system, DERs can be effectively monitored, and forecasted data can be prepared for quantizing the amount of generating electricity that can be obtained from renewable energy sources. Moreover, it can be said that MG clusters involving wind, solar, fuel cell and bio-gas based power generation with energy storage devices can meet the demands of electric vehicle charging. Further, in the contemporary scenario when the grid is in peak demand, electric vehicles can reduce the burden on the grid by injecting power through the charging port and hence power management can be done with such renewable energy-based systems. Moreover, it is very much essential to replace conventional diesel generators (DGs) with battery banks. All the residential buildings and homes are well connected to communication technologies like IOT and sensors and can be termed as Grid Connected Smart Buildings or Energy Efficient Buildings, and Smart Homes respectively. Each smart home is connected to a smart energy meter which can calculate their energy consumption, active power, reactive power, power factor, phase angles, voltage and current profile, etc. Since every MG cluster is based on renewable energy, it is considered an individual node that can participate in energy transactions. Let us consider a case of how energy transactions will happen securely so, it will be transparent to all individual nodes participating in energy transactions. Fig. 10 shows the model view of the VPP framework using blockchain smart contracts for the integration of various DERs.
Fig. 10 [Images not available. See PDF.]
Blockchain supported VPP framework for setting up future NZEGs
Case:1- Power transfer between peers
Suppose there will be a lack of power at feeder 3 (Fuel cell and Biogas + Solar based microgrid), then individual control unit energy management system (EMS) or home energy management system (HEMS) [161, 162] will notify to the Smart Energy Management System (SEMS) and then this SEMS [163] will communicate to the respective Aggregator or distributed VPP. When Feeder 3, raises a request for energy buy, immediately a smart contract which is a pre-written agreement or computer program [164], will pop up. Then there will be other nodes that might be having excess power, so they can also raise ’send’ energy requests. Based on this, a pool of requests is there. So blockchain uses a consensus algorithm to select the particular request from the pool and these consensus have predefined set points/requirements. Nodes that fulfill these set points/ requirements will become miners and will participate in the validation of transactions that are finally recorded in the blockchain. When consensus is complete, the smart contract is verified, payment is done then only the energy management system allows power to flow from one node to another. In this way, these nodes can effectively participate in Peer-to-peer energy trading [165, 166] depending upon mutual agreement between the peers based on the energy availability. So, in this case, Feeder 3 can take power from any nearby available node which is ready to send power at a comparatively fair price.
Case:2- NW trading
When consumers try to reduce their electrical demands, especially during peak time by scheduling their non-critical loads, then they will get attractive benefits either from VPP or directly from the utility, then this kind of scenario is called, NW trading. In other words, the energy trade which is entirely based on renewable energy to reduce the peak demand and enhance the power quality issues is termed as NW trading [167]. There are many challenges of P2P kilo-watt and NW energy trading such as peak load or peak shaving, environmental effects, consumer knowledge and their adaptability towards this new energy trade [168]. This NW trading can be done in a single DER cluster or it can happen between multiple DER clusters [169, 170–171]. Blockchain-based VPP and strong communication will be viable solution for NW trading and P2P energy trading by providing data transparency and enhancing data security. Let us consider a case of managing critical and non-critical loads based on demand response. Assuming at Feeder 2, there will be a lack of power. The EV charging station at feeder 2 needs immediate power. So it will raise a request for energy buy and based on this a smart contract will pop up. So SEMS [172] will notify nearby homes or societies to send the power to this EV charging station. As all houses and Buildings are Prosumers, they can take part in the Energy trading. Moreover, The SEMS will tell the buildings or owners to shut off their non-critical loads (Such as washing machines, blowers or sometimes Air-condition systems too) for some time and this way they peak demand for a particular time can be reduced and participants involve in this will get incentives from respective administrators. Thus, it can be stated that Energy transactions happen to flatten the peak demand, called as NW trading. As all transactions are blockchain-based, it is transparent to all nodes. Also, there will be the least possibilities of any foreign intruders to intercept or alter the energy transactions. At the same time, no Peer will deny the transaction they have made earlier since Blockchain itself is an immutable ledger and all the transactions are recorded using hash functions. Hence in the above two cases discussed, All the energy transactions are based on renewable energy. Not a single node is fully dependent on the grid for its operation although there will always be grid support as a backup for these prosumer buildings. Moreover, if it is required, all the nodes collectively or individually can send power to the main grid to support the utility in their peak times.
If blockchain-based VPP [173, 174] will be implemented on a large scale, then soon carbon footprint can be reduced to a great extent and the dream of NZEGs will be completed soon.
Future possibilities
VPP can maximize revenue through market participation and will be a milestone in mitigating the risk of a volatile market price but for this, more customer participation and extensive research work are required for modeling of VPP framework.
VPP can automate the demand response and provide smart scheduling of DERs as well as scheduling of loads but cyber-security and privacy are big concerns.
To prevent renewable energy curtailment and to produce power at maximum efficiency with real-time monitoring and control, implementation of VPP is essential and there is a need for many pilot projects and government help to support this framework.
As the SG is based on sensor and communication technologies, there is always a possibility of vulnerability in the electrical system, to prevent this, more advanced decentralized technologies like Distributed ledger or blockchain technology will become increasingly necessary but since blockchain is a new technology, much research will be required in terms of scaling nodes and reducing energy consumption.
Cyber-attacks are the major growing concern of the modern era. It will become more prominent with VPP and smart grid infrastructure, so dedicated research work will be required in this field to protect smart meter data and user identity. In this regard, strong authentication and cryptographic algorithms, hashing algorithms, digital signatures etc are paramount to be included in bidirectional communications.
Conclusion
It is paramount to invest in green energy production to build a carbon-neutral future. So there is an acute need to integrate more DERs in the existing grid with adequate controls and decision-making. The core of VPP augments sensor data, connected IOT devices, and an information-communication system that provides bi-directional power flow as well as data exchange pertinent to electrical parameters of the network system. With all these advanced technologies, VPPs can control all the energy market entities and provide a dynamic platform for energy trading, which will benefit distributed system operators as well as prosumers and consumers. Since VPP is a cloud-based Internet of Energy (IoE) model, it is prone to cyberattacks. To overcome this difficulty, enhance consumer trust and their active participation in the smart grid framework, it is virtuous to use blockchain technology, which is an innovative and emerging technology for building digital trust and encouraging consumers to become prosumers. This article provides a blockchain-based distributed framework for building NZEGs and also discusses two very prominent scenarios of blockchain-based distributed VPP involving P2P transactions and NW trading for building futuristic NZEGs. The NZEGs will be a great milestone, and implementing VPPs is indispensable to accomplishing the same.
Acknowledgements
The authors would like to thank the Amrita Vishwa Vidyapeetham, India, for paying the article processing charges (APC) of this publication.
Author contributions
Conceptualization, A.B., J.R., A.R., V.P.M.; Methodology, A.B., J.R., A.R., V.P.M., I.A.H.; Software, A.B., J.R., A.R., V.P.M.; Validation, I.A.H.; Formal analysis, A.B., J.R., A.R., V.P.M., I.A.H.; Investigation, I.A.H.; Resources, A.B., J.R., A.R., V.P.M., I.A.H.; Data curation, A.B., J.R., A.R., V.P.M., I.A.H.; Writing-original draft, A.B., J.R., A.R., V.P.M.; Writing-review & editing, A.B., J.R., A.R., V.P.M., I.A.H.; Visualization, A.B., J.R., A.R., V.P.M., I.A.H.; Supervision, V.P.M. and J.R.; Funding acquisition, A.R. All authors have read and agreed to the published version of the manuscript.
Funding
The authors did not receive support from any organization for the submitted work.
Data availability
The datasets used and/or analysed during the current study are available from the corresponding author on reasonable request.
Declarations
Competing interests
The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential Competing interests.
Abbreviations
Smart grid
Microgrid
Electric Vehicle
Internet of things
Virtual power plant
Net-Zero Energy Grids
Peer-to-peer
Nega-watt
Distributed energy resources
Smart Energy Management System
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
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