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Building a Community of Users for Open Market Energy

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Building a Community of Users for Open Market Energy energies Article Building a Community of Users for Open Market Energy Joao C. Ferreira 1,* ID and Ana Lucia Martins 2 1 ISTAR-IUL, Instituto Universitário de Lisboa (ISCTE-IUL), Lisboa 1649-026, Portugal 2 Business Research Unit (BRU-IUL), Instituto Universitário de Lisboa (ISCTE-IUL), Lisboa 1649-026, Portugal; [email protected] * Correspondence: [email protected]; Tel.: +351-210-464-277 Received: 20 July 2018; Accepted: 28 August 2018; Published: 4 September 2018 Abstract: Energy markets are based on energy transactions with a central control entity, where the players are companies. In this research work, we propose an IoT (Internet of Things) system for the accounting of energy flows, as well as a blockchain approach to overcome the need for a central control entity. This allows for the creation of local energy markets to handle distributed energy transactions without needing central control. In parallel, the system aggregates users into communities with target goals and creates new markets for players. These two approaches (blockchain and IoT) are brought together using a gamification approach, allowing for the creation and maintenance of a community for electricity market participation based on pre-defined goals. This community approach increases the number of market players and creates the possibility of traditional end users earning money through small coordinated efforts. We apply this approach to the aggregation of batteries from electrical vehicles so that they become a player in the spinning reserve market. It is also possible to apply this approach to local demand flexibility, associated with the demand response (DR) concept. DR is aggregated to allow greater flexibility in the regulation market based on an OpenADR approach that allows the turning on and off of predefined equipment to handle local microgeneration. Keywords: blockchain; community; energy market; electric vehicle; Demand Response; gamification; microgeneration; renewable energy 1. Introduction The energy market (production, control, and distribution) is changing from a centralized control system to a decentralized one with the introduction of new players. Information and Communication Technology (ICT) plays an essential role in this change [1]. This change comes under the topic of the smart grid, which targets the evolution of power grids towards more efficient, reliable, and environmentally sustainable systems. Adopting this approach, Distributed Energy Generation (DEG) based on renewable energy sources was introduced. The decrease in the price of solar panels and wind turbines allows the proliferation of this DEG in a microgeneration (MG) scenario. This situation is supported by new advances in the scope of the Internet of Things (IoT), with new communication devices and protocols, as well as smaller and cheaper sensors, allowing real-time measurement of distribution and transmission to a central IoT cloud platform [2]. In this context, peer-to-peer (P2P) models applied to financial transactions with associated security [3], nowadays called blockchain systems, allow the control of financial transactions without the presence of a central control entity. Blockchain can be applied to the smart grid [4]. These platforms can also benefit from collaboration systems that increase (and measure) users’ participation in resorting to predefined goals, the so-called gamification platforms [5]. Energies 2018, 11, 2330; doi:10.3390/en11092330 www.mdpi.com/journal/energies Energies 2018, 11, x FOR PEER REVIEW 3 of 21 hourly)Energies 2018and/or, 11, 2330“load following” [6]. Electricity users’ flexible behaviour can also be aggregated 2into of 21 a community that can provide services in this regulation market, using Demand Response (DR) [6]. Individuals involved in this DR approach have already participated in the service, but, as in the formerThis models, new their situation actions raises were new centrally research coordinated, challenges, and which users we only address benefited in this from work. low In energy a first prices.conceptual If they phase, are aggregated, we study theand conditionsthe processes and are the controlled potential locally, of applying they can this participate new situation more to closelyenergy in markets. this market The and primary additionally outcome earn of this money attempt as it isis thepossible creation to provide of new regulation conditions services. for small Dueplayers to the (domestic fact that the consumers) EV charging to be process part of requires the market, a long benefiting period of fromtime, reducedEVs become costs an or important receiving elementmoney. in This this can flexible be applied process toas MGit is possible energy transactions, to increase or using decrease the the principle charging that power the local during energy the chargingproduced period. is consumed locally and that associating blockchain with smart meters allows managing theseAccordingly, transactions we without propose a central a software control entity.program, This named approach Aggregator provides the(see opportunity Section 4) tothat lower is responsibleprices and increasefor collecting market user flexibility. data and An aggregat applicationing this example in a way is the that aggregation allows market of electrical participation. vehicles Based(EVs) ason playersthese defined in the energy conditions market, it asis describedthe responsibility in Section of5. Thiscentral community mechanics creation to turn approach off/on equipmentfor EVs can based be appliedon the OpenADR to increase protocol flexibility [7]. inThis consumption community ascreation a whole and (rather manipulation than the can usual be successfullyindividual behaviour),applied to a where regulation a group market of individuals for DR aggregation is aggregated flexibility, into a market where player the community that is able is to ableabsorb to shift or supply behaviour less energyeither to according consume to excess predefined energy conditions. or to decrease Figure consumption1 shows this when approach availability where isan reduced. aggregator This can approach create communities can be applied (several in this local DRusers community. working Another together) community for electricity is the market EV aggregatioparticipationn since based EVs on have the aggregation batteries that of userscan be with used a common to store or predefined deliver energy goal. Gamification as requested manages by the controlusers’ behavioursystem. towards the community goal, and blockchain allows secure financial transactions. Earn money through community market participation Gamification Platform – handle Electricity user participation Markets EV Aggregator Community Spinning EV owner Reserve Flexibility Aggregator DR User DR Appliances Community Regulation IoT Platform Smart Meters Microgeneration Blockchain - Handle Financial Transactions Tokens=Digital Money FigureFigure 1. 1. OutlineOutline of of the the m mainain work work goals goals to to create create electrical electrical vehicle vehicle (EV (EV)) and and demand demand response response (DR (DR)) communitycommunity market market player playerss and and to to decentralize decentralize fi financialnancial transactions transactions based based on on blockchain blockchain.. This paper proposes two significant methods to allow an increase in users’ participation in the The electricity market is a system that allows energy transactions based on a bid approach. electrical market using an integrated approach that combines reward gamification, the blockchain, Bids and offers use traditional economic supply and demand principles to define the price. In Section7, and the IoT platform (see Figure 1): we propose a model based on historical data in which we check users’ energy needs and current MG (1)production An MG istransaction balanced againstaccount thein a whole decentralized energy availableregulated in market the energy based market on blockchain (the price and reflects IoT thisplatform availability). implementation with associated smart meters; (2) TheOther creation components of user ofcommunities this electricity (EV marketand DR) are for the participation so-called ancillary in ancillary services services [6]. Thesemarkets. are supportingGamification services is toapplied sustain to the manage electricity and distributiongive incentive in as processfor users in’ whichparticipation production in community will always meetbehaviour demand. towards These services becoming are based a community on frequency market control, player. spinning This approach reserves, allows and operating EV owners reserves. and TheseDR services, users to withearn themoney, introduction based on of participation intermittent in renewable the ancillary energy, service raises newmarket challenges. and new market players can be introduced. Currently, blockchain with gamification can be applied to create and maintain aggregated users in a community that can play a role in this business process. The present work is mainly focused on spinning reserves and regulation, which must be able to react very quickly to supply energy (minutes or seconds after demand occurs). Energies 2018, 11, 2330 3 of 21 Spinning Reserves is the market concept related with the power capacity available in an unloaded form, normally used to overcome the failure of an operator [6]. This failure is defined as a short or long-term loss of electrical power in a specific area. As the probability of this occurrence is very low, it is interesting for EV owners to be part of a spinning reserve
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