VISVESVARAYA TECHNOLOGICAL UNIVERSITY

“Jnana Sangama”, Belagavi, Karnataka-590018

2024

A Report for Technical Seminar (18EES84)

On

“BLOCKCHAIN TECHNOLOGY IN ENERGY SECTOR”

Submitted in Partial Fulfillment for the Award of Degree

BACHELOR OF ENGINEERING IN ELECTRICAL AND ELECTRONICS

Submitted By

GOWTHAM J (4NN20EE010)

Under the Guidance of

Mr. MAHESH M
Assistant Professor
Dept of EEE, NIEIT, Mysore
 NIE INSTITUTE OF TECHNOLOGY
#50 (part), Hootagalli Industrial area, Koorgalli Village, Mysuru-18

DEPARTMENT OF ELECTRICAL AND ELECTRONICS ENGINEERING

CERTIFICATE

This is to certify that the Technical Seminar on "Blockchain Technology in Energy sector"
was carried out by Gowtham J(4NN20EE010) Bonafede students of NIEIT, Mysuru, in partial
fulfilment for the award of Bachelor of Engineering in Electrical and Electronics of the
Visvesvaraya Technological University, Belgaum during the academic year 2024. The Technical
seminar has been approved as it satisfies the academic requirements for the said degree.

Signature of Guide Signature of HOD Signature of Principal

Dr. Rohini Nagapadma
 I, Gowtham J (4NN20EE010) hereby declare that the Technical Seminar report entitled
“Blockchain Technology in Energy sector” has been carried out by me under the guidance of
Asst Prof. Mr. Mahesh M, Department of Electrical & Electronics Engineering, NIE Institute of
Technology,
Mysuru, in partial fulfilment of the requirements for the award of degree of Bachelor of
Engineering in Electrical & Electronics Engineering of Visvesvaraya Technological University,
Belagavi during the academic year 2023-2024.

Place: Mysore Signature and Name

Date: Gowtham J
(4NN20EE010)
 ACKNOWLEDGMENT

Completing this seminar work would not have been possible without the support and
guidance of many individuals. I express my heartfelt thanks to Dr. Rohini Naga Padma,
Principal of NIE Institute of Technology, Mysuru, for fostering an exceptional academic
environment and providing unwavering support. I am grateful to the entire Management
team for creating a conducive atmosphere for the successful completion of this work.

My sincere gratitude goes to Dr. Sandeep Kumar K J, Head of the Electrical and
Electronics Engineering Department at NIE Institute of Technology, Mysuru, for her
invaluable guidance and support. I also thank all the faculty and laboratory staff of the
department for their assistance throughout the project.

Special recognition goes to my parents for their inspiration, love, and faith in me, and to my
friends for their support and encouragement. I am deeply thankful to everyone who
contributed to the successful completion of this seminar work. Thank you all.
 ABSTRACT
Blockchains or distributed ledgers are an emerging technology that has drawn
considerable interest from energy supply firms, startups, technology developers, financial
institutions, national governments and the academic community. Blockchain is a powerful
technology to facilitate decarbonization, decentralization, digitalization, and democratization
(4D’s) of the energy systems of the future. The 4D’s are the driving forces of transition into
new energy systems that are more sustainable, resilient, efficient, and equitable. Although this
technology can be applied to a wide spectrum of applications in the power sector, a set of
challenges and limitations still need to be addressed to facilitate a full-scope implementation
in energy systems. This paper presents an overview of blockchain technology from its
inception through its most recent evolution and presents a thematic review of state of the art
in the application of this technology in power systems. Further, it addresses the barriers
preventing the power sector from large-scale, full-scope adoption of this technology. Finally,
the emerging blockchain trends in the near future will be discussed and its potential to
facilitate a secure, decentralized energy trading platform will be investigated. Looking ahead,
the widespread adoption of blockchain technology in the energy sector is expected to
continue, driven by regulatory evolution, interoperability standards, integration with IoT and
AI technologies, and a heightened focus on sustainability and environmental responsibility.
 TABLE OF CONTENTS

CHAPTER PG NO

CHAPTER 1
1.1 Introduction 1

1.2 Overview of blockchain technology 2

CHAPTER 2
2.1 Blockchain in energy sector 3

2.2 Application of Blockchain in energy sector 3

2.2.1 Microgrid 3

2.2.2 Internet of Things 4

2.2.3 Peer to peer energy market 5

2.2.4 Electric vehicles 6

2.2.5 Democratization of power systems 6

CHAPTER 3

3.1 Challenges and Limitations 7

3.1.1 Infrastructural problems 7

3.1.2 Scalability 8

3.1.3 Regulatory Uncertainty 8

3.2 Use case 9

CHAPTER-04
4 Conclusion 10

Reference
 LIST OF FIGURES

FIGURES PG NO.

Fig.1 Structure of blockchain 2

Fig 2.1 Blockchain based microgrid 3

Fig 2.2 Data transfer in Blockchain 4

Fig 2.3 P2P trading model of energy in Blockchain 5

Blockchain technology in Energy sector 2024

CHAPTER 1

1.1 INTRODUCTION
Blockchain technology is making waves in the energy industry. Blockchain can help
facilitate communication between distributed energy resources like a solar panel, smart meters,
or a smart grid. This technology can also automate energy transactions through smart contracts,
making it easier to engage in a transactive energy system. While blockchain technology has the
potential to unlock several benefits and opportunities, many people do not have a clear idea of
how blockchain works or how it impacts energy distribution. Understanding blockchain
applications in energy can help accelerate change and disrupt the energy industry as a whole,
which is quickly getting older. Decarbonization, decentralization, democratization, and
digitalization (4D’s) are the four pillars of transitioning into the energy systems of the future.
The introduction of blockchain technology has provided a new set of opportunities to facilitate
this transition. Blockchain has been successfully used in a wide range of applications, including
in token economy, supply chain management, personal health recording, insurance and waste
management, to name a few. One promising and growing application of the blockchain is in
the energy sector in general, and power systems in particular.

Blockchain has the potential to change the basis of many of the existing operational models in
the power and utilities sector including, networked grids, demand-side management, the
Internet of Things (IoT), electric vehicles (EVs), and cybersecurity, among others. Given the
larger number of users, the distribution system can benefit from blockchain far more than other
segments of the power systems. Blockchain enables the processing and recording of energy
data transactions in such systems, but on a digital dis-tributed ledger and in a more secure and
transparent manner. Furthermore, smart contracts on blockchain platforms can be leveraged to
automate certain procedures in the network. The first adoption of blockchain technology in the
energy sector dates to 2015, which was followed by the electric vehicle industry in 2016. The
implementation of blockchain for enhancing the security aspects of smart grids in 2017 and
using blockchain in optimal microgrid operation projects in 2018 are some of the initiatives
that have been taken to further utilize this technology in the power sector.

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Blockchain technology in Energy sector 2024

1.2 Overview of Blockchain technology

Blockchain technology and smart contracts are intricately linked innovations that have
revolutionized digital transactions. Blockchain, as a decentralized and immutable ledger,
provides a secure and transparent platform for recording and verifying transactions across a
network of computers. Smart contracts, on the other hand, are self-executing contracts with the
terms of the agreement directly written into code. These contracts automatically execute and
enforce themselves when predefined conditions are met, without the need for intermediaries.
By leveraging blockchain technology, smart contracts enable trust less and tamper-proof
transactions, eliminating the need for intermediaries and reducing transaction costs and
processing times. This combination of blockchain and smart contracts has vast implications
across various industries, from finance and supply chain management to real estate and
healthcare, by streamlining processes, enhancing security, and enabling new business models.

Fig.1 Structure of Blockchain

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Blockchain technology in Energy sector 2024

CHAPTER 2

2.1 Blockchain in Energy Sector

In this section, applications of blockchain technology in power systems, along with
blockchain architectures that are most compatible with power systems, are discussed. It is
worth noting that all these applications are emerging topics in smart grids and need to be
operated collaboratively. Therefore, overlaps between some of these applications are
inevitable, and holistic system thinking approach for each specific application of blockchain in
power systems is required to take full advantage of this technology.

2.2 Application of Blockchain in Energy sector

There six different categories of blockchain applications in energy systems, including
microgrids, the Internet of Things, electric vehicles, cybersecurity, peer-to-peer energy
markets, and the democratization of power systems.

2.2.1 Microgrids
Blockchain offers new ways for local grids to become decentralized through smart contracts
and distributed consensus mechanisms. Many companies find that a traditional blockchain
model is not scalable to microgrids and therefore suggest hybrid net-works with both
decentralized and centralized structures. The proposed model for P2P energy sharing in DC
microgrids that allows the users to share their surplus energy from distributed energy resources
with minimal distribution
and conversion losses.

Fig2.1 Blockchain based Microgrid

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Blockchain technology in Energy sector 2024

2.2.2 Internet of Things (IoT)

IoT is a system of computing devices that are embedded in everyday objects that can transmit
data without human inter-action. IoT devices themselves have limited computing power and
cannot be directly attached to a blockchain. IoT use inexpensive sensors to collect a massive
amount of data in IoT networks. Since its origins in the 1990s, the IoT has faced issues of
scalability and security of the data it produces. This is especially important for the power
industry because IoT devices and blockchain can enable better grid management, reliable real-
time data provision, and secure system monitoring,

Fig2.2 IoT Data transfer in Blockchain

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Blockchain technology in Energy sector 2024

2.2.3 Peer-to-peer energy markets

The transaction infrastructure and market rules are two key ingredients of markets, including
P2P energy markets. In this context a decentralized framework for P2P energy trading on a
blockchain between the power producer and consumer agents. The decentralized market
settlement mechanism incentivizes power producers and consumers to transact with their
nearby agents. A reputation factor reflecting the past performance of power producers in
delivering the committed energy was incorporated into the model to facilitate the negotiation
process between agents. It was shown that the design choices in the blockchain layer of local
energy markets could significantly affect both community welfare and computing resources;
hence, assessment of possible trade-offs between them should be considered in the market
design process. There is also possibilities of an auction-based local energy market design on a
permissioned blockchain. We can also designe a decentralized P2P energy trading platform that
includes two key layers, namely the market layer and the blockchain layer.

Blockchain
Payment using
energy tokens
Fig2.3 P2P trading model of energy in blockchain

The market layer includes a parallel and short-term pool-structured auction mechanism with a
decentralized market clearing process through an Ant Colony Optimization (ACO) algorithm.
The Electron Volt Exchange (EVE) framework as a distributed protocol for pricing and
scheduling power generation and consumption by prosumers while it preserves the privacy of
network constraints and the bidding process in the market.

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Blockchain technology in Energy sector 2024

2.2.4 Electric vehicles

Blockchain technology has the potential to significantly impact the electric vehicle (EV)
industry by addressing key challenges such as charging infrastructure, energy management,
and data security. One of the primary applications of blockchain in electric vehicles is in the
development of decentralized charging networks. Through blockchain-based platforms, EV
owners can access a network of charging stations, seamlessly paying for electricity usage
without the need for multiple accounts or payment systems. Moreover, blockchain enables
transparent and tamper-proof recording of charging transactions, enhancing trust between EV
owners and charging station operators. Additionally, blockchain can facilitate peer-to-peer
energy trading, allowing EV owners to sell excess energy stored in their vehicle batteries back
to the grid or other consumers. This decentralized energy management system not only
maximizes the utilization of renewable energy sources but also incentivizes EV adoption by
providing additional income streams for owners. Furthermore, blockchain technology ensures
the security and integrity of data exchanged between EVs, charging stations, and grid operators,
protecting against cybersecurity threats and ensuring privacy. Overall, blockchain holds the
promise of revolutionizing the electric vehicle industry by enabling efficient, secure, and
decentralized energy and payment systems.

2.2.5 Democratization of power systems

The democratization of power systems through blockchain technology represents a paradigm
shift in energy management and distribution. By leveraging blockchain's decentralized ledger
and smart contract capabilities, power systems can be democratized, empowering individual
consumers and renewable energy producers to actively participate in energy markets.
Blockchain enables peer-to-peer energy trading, allowing consumers to buy, sell, and trade
energy directly with one another without the need for intermediaries. This disintermediation
fosters greater competition, transparency, and efficiency in energy markets, while also
promoting the integration of renewable energy sources. Moreover, blockchain facilitates
transparent and secure tracking of renewable energy production and consumption,
incentivizing investment in clean energy and reducing reliance on centralized energy providers.
Through blockchain, power systems become more inclusive and resilient, empowering
communities to take control of their energy futures and accelerate the transition towards a
sustainable and decentralized energy landscape.

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Blockchain technology in Energy sector 2024

CHAPTER 3
3.1 CHALLENGES AND LIMITATIONS
Blockchain offers a wide range of new opportunities for enhancing security and
transparency, But there are six different categories of opportunities that blockchain can be
applied in power systems was discussed. If successful, these application opportunities can
fundamentally transform the energy systems of the future. However, all of these application
areas face a set of common challenges that need to be addressed in order to facilitate their
success before they can be fully deployed and adopted in the power and energy industry. One
significant challenge is regulatory uncertainty and compliance. The energy sector operates
within a complex regulatory environment, and integrating blockchain solutions may require
legal and regulatory frameworks to evolve to accommodate this new technology.
Interoperability is another challenge, as different blockchain platforms may have varying
protocols and standards, making it difficult to seamlessly integrate with existing energy
systems and technologies. Scalability is also a concern, particularly as blockchain networks
grow in size and complexity. Current blockchain networks may struggle to handle the volume
of transactions and data associated with energy trading and grid management, leading to
potential bottlenecks and delays. Additionally, the environmental impact of energy-intensive
blockchain mining processes poses a challenge to sustainability goals within the energy sector.
Addressing these challenges will require collaboration among industry stakeholders,
technological innovation, and regulatory support to unlock the full potential of blockchain in
the energy sector.

3.1.1 Infrastructural problems

Blockchain technology can eliminate intermediaries in a decentralized platform. However,

deploying this technology requires a bespoke design for the infrastructure in place that enables
P2P transactions [17]. Integrating existing smart meters and power grid infrastructure with
blockchain technology may incur significant upgrade costs, whereas storing energy
transactions in conventional databases rather than adding them to a ledger is less costly and
without latency. Ref. shows that the bandwidth requirement for a blockchain-enabled system
is approximately ten times that of a real-time advanced metering infrastructure (AMI)
application. Therefore, blockchain applications that require high bandwidth should use a
suitable communication medium. Several other references have addressed the issue of

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Blockchain technology in Energy sector 2024

communication overhead caused by blockchain. For instance, to evaluate the overhead issue in
their nonrepudiation service provision scheme for an IoT application and find that the hash
function is the main source of the overhead. Communication overhead reduces system
efficiency and increases transaction latency in modern power grids. However, more work is
needed to make the blockchain suitable for the power industry. Researchers have begun
working on this issue by designing novel consensus mechanisms and using cloud-based
blockchain techniques such as fog computing in IoT applications.

3.1.2 Scalability
One of the primary challenges facing blockchain in the energy sector is scalability. As the
number of transactions and participants within energy networks grows, traditional blockchain
networks struggle to handle the increasing volume of data and transactions. This scalability
issue can lead to congestion and slower transaction processing times, inhibiting the efficiency
of energy trading platforms and grid management systems. Addressing scalability concerns is
crucial for ensuring the seamless operation of blockchain-based solutions in the energy sector

3.1.1 Regulatory Uncertainty

Regulatory frameworks governing the energy sector vary widely across different regions, and
they often lag behind technological advancements such as blockchain. Uncertainty surrounding
regulatory compliance and legal frameworks presents a significant barrier to the adoption of
blockchain technology in energy markets. Regulatory clarity is essential for fostering
confidence among energy companies, investors, and consumers and encouraging the
widespread implementation of blockchain-based solutions. Overcoming regulatory hurdles
requires collaboration between industry stakeholders and policymakers to develop flexible and
forward-thinking regulatory frameworks.

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Blockchain technology in Energy sector 2024

3.2 Use Case – Uttar Pradesh Rooftop Solar Trading Platform,

India
Project
In December 2020, Uttar Pradesh Power Corporation Limited launched India’s and South
Asia’s first peer-to-peer blockchain-enabled solar rooftop trading platform in partnership with
Power Ledger, Australia, India Smart Grid Forum (ISGF), and Abajyon Consulting. The results
of the pilot will help the state government in framing of regulations for peer-to-peer rooftop
solar trading.

Process
The trading platform’s first 12 participants comprised of nine prosumers with rooftop solar
and three customers without rooftop solar. The participants were engaged in mock trading (no
money transactions) for the next three months, during which ISGF tried out different trading
algorithms. At the end of the experiment period, the project is expected to be scaled up.

Application for energy access

Uttar Pradesh is one of the largest states in India, with around 50% rural households still
unelectrified. The blockchain-based rooftop solar trading platform will enable energy access to
the underserved rural areas with the help of a seamless transaction that can be carried out from
any mobile device. The project will be instrumental in framing state-wide, and later nationwide,
regulations around blockchain-based trading, in order to replicate the UP model to other states
as well.

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Blockchain technology in Energy sector 2024

CHAPTER 4
4. Conclusion
In conclusion, blockchain technology offers transformative potential across various facets of
the energy sector, including grid management, peer-to-peer (P2P) trading, electric vehicles
(EVs), and the decentralization of energy. Through blockchain-enabled grid management
systems, energy utilities can enhance efficiency, transparency, and resilience by optimizing
energy distribution, balancing supply and demand, and securely managing grid operations. P2P
trading platforms powered by blockchain enable consumers to directly buy, sell, and trade
energy with one another, fostering a more decentralized and democratized energy market. In
the realm of electric vehicles, blockchain facilitates seamless integration with charging
infrastructure and grid systems, enabling secure and transparent transactions for EV charging
and vehicle-to-grid (V2G) interactions. Moreover, blockchain technology enables the
decentralization of energy production and distribution, empowering consumers to become
active participants in energy markets and promoting the adoption of renewable energy sources.
By leveraging blockchain's capabilities in grid management, P2P trading, EV integration, and
decentralization, the energy sector can embrace innovation, increase efficiency, and transition
towards a more sustainable and resilient energy ecosystem.

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