Computer Science - Research and Development

, Volume 33, Issue 1–2, pp 207–214 | Cite as

A blockchain-based smart grid: towards sustainable local energy markets

  • Esther MengelkampEmail author
  • Benedikt Notheisen
  • Carolin Beer
  • David Dauer
  • Christof Weinhardt
Special Issue Paper


The increasing amount of renewable energy sources in the energy system calls for new market approaches to price and distribute the volatile and decentralized generation. Local energy markets, on which consumers and prosumers can trade locally produced renewable generation directly within their community, balance generation and consumption locally in a decentralized approach. We present a comprehensive concept, market design and simulation of a local energy market between 100 residential households. Our approach is based on a distributed information and communication technology, i.e. a private blockchain, which underlines the decentralized nature of local energy markets. Thus, we provide energy prosumers and consumers with a decentralized market platform for trading local energy generation without the need of a central intermediary. Furthermore, we present a preliminary economic evaluation of the market mechanism and a research agenda for the technological evaluation of blockchain technology as the local energy market’s main information and communication technology.


Local energy markets Market design Decentralization Blockchain 



Financial support of Boerse Stuttgart is gratefully acknowledged.


  1. 1.
    Adil AM, Ko Y (2016) Socio-technical evolution of decentralized energy systems: a critical review and implications for urban planning and policy. Renew Sustain Energy Rev 57:1025–1037CrossRefGoogle Scholar
  2. 2.
    Aitzhan NZ, Svetinovic D (2016) Security and privacy in decentralized energy trading through multi-signatures, blockchain and anonymous messaging streams. IEEE Tran Dependable Secure Comput PP(99):1Google Scholar
  3. 3.
    Al Kawasmi E, Arnautovic E, Svetinovic D (2015) Bitcoin-based decentralized carbon emissions trading infrastructure model. Syst Eng 18(2):115–130CrossRefGoogle Scholar
  4. 4.
    Alam MT, Li H, Patidar A (2015) Bitcoin for smart trading in smart grid. In: International workshop on local and metropolitan area networks (LANMAN 2015), pp 1–2Google Scholar
  5. 5.
    Augur (2017) Welcome to the future of forecasting. Accessed 3 Aug 2017
  6. 6.
    Beck R, Stenum Czepluch J, Lollike N, Malone S (2016) Blockchain–the gateway to trust-free cryptographic transactions. In: European conference on information systems (ECIS 2016)Google Scholar
  7. 7.
    Block C, Neumann D, Weinhardt C (2008) A market mechanism for energy allocation in micro-chp grids. In: Proceedings of the 41st annual hawaii international conference on system sciences, pp 172–172Google Scholar
  8. 8.
    Blouin MR, Serrano R (2001) A decentralized market with common values uncertainty: non-steady states. Rev Econ Stud 68(2):323–346MathSciNetCrossRefzbMATHGoogle Scholar
  9. 9.
    Böhme R, Christin N, Edelman B, Moore T (2015) Bitcoin: economics, technology, and governance. J Econ Perspect 29(2):213–238CrossRefGoogle Scholar
  10. 10.
    Brooklyn Microgrid (2016) The Brooklyn Microgrid. Accessed 9 May 2017
  11. 11.
    Commission European (2016) Clean energy for all europeans. Com, (2016) 860 final. EC. Accessed 31 July 2017Google Scholar
  12. 12.
    Docker Deployment (2017) eAuction. Accessed 3 Aug 2017
  13. 13.
    Etemad RH, Lahouti F (2016) Resilient decentralized consensus-based state estimation for smart grid in presence of false data. In: International conference on acoustics, speech and signal processing (ICASSP 2016)Google Scholar
  14. 14.
    Ethereum (2017) Solidity—copyright 2016–2017, Ethereum. Revision c3b839ca. Accessed 9 May 2017
  15. 15.
    Ethereum Foundation (2017) Ether—the crypto-fuel for the Ethereum network. Accessed 9 May 2017
  16. 16.
    Glaser F, Bezzenberger L (2015) Beyond cryptocurrencies—a taxonomy of decentralized consensus systems. In: European conference on information systems (ECIS 2015), association for information systems (AIS), AIS Electronic LibraryGoogle Scholar
  17. 17.
    Gödde M, Kaiser A, Stumpp M (2017) DEX—decentralized energy exchange. Accessed 18 May 2017
  18. 18.
    Gode DK, Sunder S (1993) Allocative efficiency of markets with zero-intelligence traders: market as a partial substitute for individual rationality. J Polit Econ 101(1):119–137CrossRefGoogle Scholar
  19. 19.
    Goebel C, Jacobsen HA, Razo V, Doblander C, Rivera J, Ilg J, Flath C, Schmeck H, Weinhardt C, Pathmaperuma D, Appelrath HJ, Sonnenschein M, Lehnhoff S, Kramer O, Staake T, Fleisch E, Neumann D, Strüker J, Erek K, Zarnekow R, Ziekow H, Lässig J (2014) Energy informatics. Bus Inf Syst Eng 6(1):25–31CrossRefGoogle Scholar
  20. 20.
    Kok K, Roossien B, MacDougall P, Van Pruissen O, Venekamp G, Kamphuis R, Laarakkers J, Warmer C (2012) Dynamic pricing by scalable energy management systems field experiences and simulation results using PowerMatcher. In: Power and energy society general meeting, 2012 IEEE, pp 1–8Google Scholar
  21. 21.
    Kosba A, Miller A, Shi E, Wen Z, Papamanthou C (2016) Hawk: the blockchain model of cryptography and privacy-preserving smart contracts. In: 2016 IEEE symposium on security and privacy (SP), pp 839–858Google Scholar
  22. 22.
    Lamparter S, Becher S, Fischer JG (2010) An agent-based market platform for smart grids. In: Proceedings of the 9th international conference on autonomous agents and multiagent systems: industry track, international foundation for autonomous agents and multiagent systems, pp 1689–1696Google Scholar
  23. 23.
    Li CT, Weng CY, Lee CC, Wang CC (2015) A hash based remote user authentication and authenticated key agreement scheme for the integrated epr information system. J Med Syst 39(11):1–11CrossRefGoogle Scholar
  24. 24.
    Mengelkamp E, Gärttner J, Rock K, Kessler S, Orsini L, Weinhardt C (2017) Designing microgrid energy markets: a case study: the brooklyn microgrid. Appl Energy.
  25. 25.
    Mihaylov M, Jurado S, Avellana N, Van Moffaert K, de Abril IM, Nowe A (2014) NRGcoin: virtual currency for trading of renewable energy in smart grids. In: International conference on the European energy market (EEM 2014). IEEE, pp 1–6Google Scholar
  26. 26.
    Mihaylov M, Jurado S, Van Moffaert K, Avellana N, Nowé A (2014b) NRG-X-change—a novel mechanism for trading of renewable energy in smart grids. In: SMARTGREENS, pp 101–106Google Scholar
  27. 27.
    Monacchi A, Elmenreich W (2016) Assisted energy management in smart microgrids. J Ambient Intell Humaniz Comput 7(6):901–913CrossRefGoogle Scholar
  28. 28.
    Nakamoto S (2008) Bitcoin: a peer-to-peer electronic cash system. Accessed 9 May 2017
  29. 29.
    Nicolaisen J, Petrov V, Tesfatsion L (2001) Market power and efficiency in a computational electricity market with discriminatory double-auction pricing. IEEE Trans Evol Comput 5(5):504–523CrossRefGoogle Scholar
  30. 30.
    Nieße A, Lehnhoff S, Tröschel M, Uslar M, Wissing C, Appelrath HJ, Sonnenschein M (2012) Market-based self-organized provision of active power and ancillary services: an agent-based approach for smart distribution grids. In: Complexity in engineering (COMPENG), 2012, pp 1–5Google Scholar
  31. 31.
    O’Dwyer KJ, Malone D (2013) Bitcoin mining and its energy footprint. In: Irish signals and systems conference 2014 and 2014 China–Ireland international conference on information and communications technologies, pp 280–285Google Scholar
  32. 32.
    Pass R, et al (2015) Micropayments for decentralized currencies. In: Proceedings of the 22nd ACM SIGSAC conference on computer and communications security, ACM, pp 207–218Google Scholar
  33. 33.
    Schleicher-Tappeser R (2012) How renewables will change electricity markets in the next five years. Energy Policy 48:64–75CrossRefGoogle Scholar
  34. 34.
    Sikorski JJ, Haughton J, Kraft M (2017) Blockchain technology in the chemical industry: machine-to-machine electricity market. Appl Energy 195:234–246CrossRefGoogle Scholar
  35. 35.
    Stadtwerke Unna (2002) VDEW-Lastprofile. Accessed 9 May 2017
  36. 36.
    Tian F (2016) An agri-food supply chain traceability system for China based on RFID and blockchain technology. In: 13th international conference on service systems and service management (ICSSSM), 2016, pp 1–6Google Scholar
  37. 37.
    Vytelingum P, Ramchurn SD, Voice TD, Rogers A, Jennings NR (2010a) Trading agents for the smart electricity grid. In: Proceedings of the 9th international conference on autonomous agents and multiagent systems, pp 897–904Google Scholar
  38. 38.
    Vytelingum P, Voice TD, Ramchurn SD, Rogers A, Jennings NR (2010b) Agent-based micro-storage management for the smart grid. In: Proceedings of the 9th international conference on autonomous agents and multiagent systems: volume 1, international foundation for autonomous agents and multiagent systems, pp 39–46Google Scholar
  39. 39.
    Wattenhofer R (2016) The science of the blockchain, 1st edn. Inverted Forest Publishing, ZurichGoogle Scholar
  40. 40.
    Wüstenhagen R, Wolsink M, Bürer MJ (2007) Social acceptance of renewable energy innovation: an introduction to the concept. Energy Policy 35(5):2683–2691CrossRefGoogle Scholar
  41. 41.
    Xu X, Pautasso C, Zhu L, Gramoli V, Ponomarev A, Tran AB, Chen S (2016) The blockchain as a software connector. In: 13th Working IEEE/IFIP conference on software architecture (WICSA), 2016, pp 182–191Google Scholar
  42. 42.
    Yuan Y, Wang FY (2016) Towards blockchain-based intelligent transportation systems. In: 2016 IEEE 19th international conference on intelligent transportation systems, pp 2663–2668Google Scholar

Copyright information

© Springer-Verlag GmbH Germany 2017

Authors and Affiliations

  • Esther Mengelkamp
    • 1
    Email author
  • Benedikt Notheisen
    • 1
  • Carolin Beer
    • 1
  • David Dauer
    • 2
  • Christof Weinhardt
    • 1
  1. 1.Karlsruhe Institute of Technology, IISMKarlsruheGermany
  2. 2.FZI Forschungszentrum InformatikKarlsruheGermany

Personalised recommendations