EnerPort: Irish Blockchain project for peer- to-peer energy trading

“EnerPort” is an Irish government- and industry-funded collaborative project where blockchain technology is being used to develop a peer-to-peer (P2P) energy trade model to support energy trade between microgrids. This project is led by the International Energy Research Centre partnering with National University of Ireland Galway and University College Cork, and aims to address some key challenges around associated hardware and software requirements, as well as analysing market and regulatory issues. It is a 12 month project that started on 1st March 2018 and will end on 28th February 2019. This brief report aims to introduce the EnerPort project to a broader international audience and explain all of the key details including the structure and objectives of the project, the methodology, demonstration approach, and expected results. A final report will be published at the end of the project to summarize the project results, future impact, and future work.

The global electricity market is facing the disruptive 3D’s: digitalization, decentralization and decarbonization which brings with it enormous changes and challenges to the electricity sector. These 3D’s are not only driving the electricity consumers or businesses and industries involved in the electricity sector, but it has also made various other stakeholders beyond the electricity sector think about addressing the intersection of technology, software, economics, markets, regulations, etc. Along with these 3D’s as disruptive drivers, other drivers for change are also important in terms of international and regional commitments and national plans and policies such as the Energy Efficiency Directive, the European Renewable Energy Directive, the Energy Union Package and the resulting National Plan including the Low-Carbon White Paper (Department of Communication Climate Action and Environment, 2015), the National Energy Efficiency Action Plan (Department of Communication Climate Action and Environment, 2014) and the National Mitigation Plan (Department of Communications Climate Action and Environment, 2017).

In parallel with these drivers, the penetration of renewables in Ireland has increased to 27.8% of gross electricity consumption in 2015 (Sustainable Energy Authority of Ireland (SEAI), 2016) which is increasing year-on-year, and these renewables are also being extended in terms of distributed generation/microgrids along with centralized renewable-based electricity generation. This proliferation of distributed generation enables infrastructure changes to address the dynamic nature of the demand side. Irish government is also implementing the smart meter programme which will make the electricity infrastructure more flexible to integrate with other innovative technologies. With intelligent, connected components plugged into an increasingly smarter grid, electricity consumers will become direct participants in the energy network.

Energy trading within an individual microgrid and/or between multiple microgrids is necessary to maximize the usage of renewable energy. Lack of secure, regulated and flexible markets for energy trading is the main motivation of this project. The desirable properties of such a market are (a) autonomous execution of trading decisions - autonomous execution of trading decisions will remove the burden to study the energy market and decision making of microgrid owners, (b) security of information shared for trading - security of information requires guarantees that information will not be overwritten, (c) governance of the market - governance requires checking the compliance of traders, and (d) scalable execution of market models - scalability of the market is indicated as an increase in the number of trades as the market grows. This project will use blockchain technology to deliver these properties more efficiently and securely (PricewaterhouseCoopers, 2016). Blockchain smart contracts will be used to automate the trading decision making process. A blockchain-distributed consensus protocol is a solution for the self-regulation of such a market, i.e., a few microgrids cannot deviate from the regulations of the market. Blockchain will facilitate parallel and asynchronous trades between microgrids to improve the market scalability.

This project is named as “EnerPort” and it is an industry-led collaborative research project that will investigate new market models for peer-to-peer (P2P) energy trading.¹ This involves implementing blockchain technology with smart metering, and designing and demonstrating residential hardware and software platforms in the laboratory of the Power Electronics Research Centre (PERC) at NUI Galway and University College Cork. It will develop a new software tool for the co-simulation of electricity distribution networks and blockchain-based peer-to-peer energy trading. A simple block diagram to highlight the key aspects of the EnerPort project has been shown in the Fig. 1 below:

The International Energy Research Centre (IERC) is the lead member of the EnerPort consortium that includes the Insight SFI Centre for Data Analytics at NUI Galway, University College Cork and Irish companies including Systemlink, mSemicon, Verbatm.

The key objectives of this project are outlined below:

Current electricity markets are not decentralized or flexible enough to integrate massive numbers of highly-distributed variable renewable resources in an efficient manner. This problem is addressed by P2P trading, since it enables large numbers of small-scale energy prosumers to match supply/demand at a local level. This has the potential to reduce the need for system operators to provide power system flexibility and balancing services through conventional means (spinning and non-spinning generation reserves from large fossil-fuel power plants).

There are some start-ups which have considered the potential of blockchain technology and trying to revolutionize how energy can be generated and traded locally. Blockchain enabled peer-to-peer electricity trading by Powerledger (PowerLedger, n.d.), community powered microgrid by Brooklyn microgrid (Brooklyn microgrid, n.d.) and community energy trading platform by Powerpeers (Powerpeers community energy trading platform, n.d.) are few examples that are currently implementing demonstration projects and finding the possible ways to scale the technology. A recent research has also implemented to facilitate machine-to-machine (M2M) interactions and establish a M2M electricity market in a chemical industry where they have presented a scenario which includes an electricity consumer and two electricity producers trading with each other over a blockchain platform (Sikorski et al., 2017).

In spite of several advantages, blockchain still has number of concerns around system complexity, computational overhead, data storage, processing times etc. which will evolve over the time as the technology gets matured.

A project management structure has been adopted to define and control the responsibilities, as well as for the timely and cost-effective delivery of this project. This project is led by a Project Steering Committee which consists of members from IERC, NUI Galway, University College Cork and a representative from each of the three industry partners.

Currently, there are very few existing projects worldwide which have been able to demonstrate the hardware and software requirements for blockchain-enabled peer-to-peer energy trading and its applications in the context of a distributed grid. This project will demonstrate the hardware and software required to implement peer-to-peer energy trading in the distributed grid in a laboratory environment and through extensive blockchain simulations. This will allow industry to test peer-to-peer energy trading applications to better understand the future potential and applications of the technology in the energy domain.

This project will provide scalable proof-of-concept demonstrations for blockchain-based peer-to-peer energy trading in the distributed grid, and will address key challenges around hardware and software requirements and protocols, as well as issues around markets, regulations and policy. This will help to accelerate the deployment of novel energy trading systems and drive innovation in distributed grid technologies in Ireland, and it is anticipated that the results of this project will help to accelerate the development and deployment of this technology.