Smart Contract as an Enabler for the Digital Green Transition

Modern power systems are evolving towards decarbonization and digitalization phases leading to Transactive Energy Systems (TES). Application of technology like Distributed Ledger Technology (DLT) to develop a TES is not an unheard topic of research. The joint operation of TES and DLT is providing various new opportunities and business models where smart contracts can play an enabler role to amalgamate interconnected systems like power systems and digital infrastructure and services. Furthermore, the current global environmental and political climate accentuates the need for clean energy sources combined with the need for deregulation, decentralization, decarbonization, digitalization, and democratization in the energy ecosystem. This work aims to demystify the potential of smart contracts as an enabler technology for the Digital Green Transition of the energy industry from a TES perspective. The work also explores how smart contracts can be used in various TES use cases. Furthermore, some insight into how policy, legal, and legislative requirements can impact the use of a smart contract for future energy grid is also provided.

I. Introduction

The evolution of digital technologies like advanced communication systems, metering devices, Internet of Things (IoT) in conjunction with renewable is converting the once passive distribution grid to an active one, forming a Transactive Grid or Transactive Energy Systems (TES). TES includes managing the generation, consumption, and flow of electric power within a grid through the use of economic or market-based constructs while respecting grid reliability constraints [1]. A sophisticated, decentralized, and smart automatic TES allows moving from centralized grid topology to highly transactive, distributed, to encourage consumer participation and distributed generation, to enable innovative products and markets, optimized asset utilization with operating efficiency and resilience to disturbances, attacks, and natural disasters. Recent regulatory movements by many governments are also promoting more decarbonized and decentralized energy systems. The technological and policy changes during this tenure increased the integration of new energy resources and business models, which in return enabled consumers to take a more active part in electrical energy production.