Conceptualization and Validation of Interoperability in Blockchain Enabled Interconnected Smart Microgrids

Abstract

Power systems are undergoing rapid transitions to incorporate renewable sources of generation and to combat climate change. It is expected that the next stage of transitions will lead to a shift from large-scale, centralized systems to networks of small-sized, distributed electricity systems, which may benefit from technologies of distributed or decentralized ledgers for database management for efficient transactions. Distributed Ledger Technology (DLT) are a form of decentralized ledgers where the transactions (energy, information, and money) among various entities are maintained. One such DLT is Blockchain Technology (BCT) which offers several advantages. Data recorded in blockchains are difficult to tamper with; have privacy protection; facilitate fast, accurate, and real-time settlement of financial transactions. Contemporary research has started focusing on their possible applications in energy systems. However, with increase in the adoption of BCT, a mix of blockchain platforms will emerge, making the system heterogeneous. This can hinder inter-microgrid or peer-to-peer operations unless interoperability is established to facilitate communication and asset transfers between the participants. The proposed research addresses these challenges by conceptualizing and validating interoperable blockchain enabled smart microgrids (BSMGs). The first phase builds a conceptual framework of BSMG, including the transaction protocols and process flows. It proposes the inclusion of network constraints in a three-level transaction setup executed over a four-layered architecture. It also provides a conceptual architecture for achieving interoperability between different BSMGs. In the second phase, different methods of interoperability are reviewed extensively to select the method most suitable for BSMGs. The method must contain developer tools and adhere to InterChain Standards (ICS). Cosmos Hub, a blockchain inetwork which allows blockchains to connect, is chosen to execute interchain data and asset transfers. It utilizes InterBlockchain Communication (IBC) protocol and Ignite CLI, an open-source command line interface tool. In the third phase, data and financial interoperability are explored. Data interoperability is demonstrated for the first time in the energy sector. The methodology and setup are discussed. The effect of number of users, number of data transfers (serial and parallel), and inclusion of another BSMG on the execution times are investigated. Financial interoperability is imperative as it ensures different BSMGs which use different energy tokens or cryptocurrencies can exchange assets amongst each other. An on-chain order book which is a simple form of Decentralized Token Exchange system is implemented to manage the different tokens. These works are proposed and executed for the first time in the energy sector.