Energy trading using blockchain: Smart contracts functionalities – A systematic review

Abstract

The widespread adoption of distributed energy resources poses challenges to the operation and management of electricity grids. The intrinsic characteristics of such resources, such as variability and dispatchability, require increased flexibility in power systems. Demand-side flexibility is expected to play a significant role in future power systems, necessitating a more active role for consumers and prosumers in the energy system. To effectively operationalize flexibility and accommodate the growth of distributed generation, there is an urgent need for active and automated local management of energy resources alongside local transactions and energy exchanges. Technologies like blockchain and smart contracts offer significant potential for facilitating energy transactions within decentralized systems, mainly due to their capacity to facilitate secure microtransactions over time. Although their potential is recognized and review works exist, a detailed understanding of their characteristics and functionalities is lacking, which is critical for the deployment of those technologies. In this regard, the authors utilize the Prisma protocol to conduct a comprehensive analysis of current developments, identify primary innovative contract functionalities, quantify their utilization, and uncover potential gaps in their application in local energy transactions. They were analyzed 197 smart contracts, where 179 indicated at least one functionality. The findings suggest that most of these functionalities focus on energy transactions without details. They were identified and characterized in terms of the type of blockchain on which these smart contracts were developed. The conclusions show that they primarily work on a private Ethereum, promoting transactions between two peers in real-time and in the day ahead. The study culminates in an inclusive conclusion that spans the range of smart contract functionalities across different aspects of blockchain technology and temporal trade dynamics. This analysis reveals a significant gap in the transaction approach involving multiple sellers and buyers, underscoring the need for further exploration. This gap presents an exciting opportunity for future research and development in energy management, particularly in the context of blockchain's potential to facilitate local energy transactions. • Review of smart contracts for energy trading based on 127 reviewed articles. • Presentation of the smart contract's functionalities for energy trading. • Critical features overview of reviewed energy trading platforms. • Identification of the challenges in applying smart contracts in energy transactions. • Recommendations to consider when implementing smart contracts for energy trading.

Topics & Concepts