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Blockchain for Future Smart Grid: A Comprehensive Survey

Muhammad Baqer Mollah, Jun Zhao, Dusit Niyato, Kwok-Yan Lam, Xin Zhang, Amer M. Y. M. Ghias, Leong Hai Koh, Lei Yang

arXiv:1911.03298v2cs.CRcs.DCcs.NIcs.SIeess.SY

TL;DR

The paper addresses the challenge of coordinating an increasingly connected smart grid as it shifts from centralized to decentralized operation, alongside security, privacy, and trust concerns. It provides a comprehensive survey of blockchain applications, related initiatives, and future research directions. The survey organizes existing contributions and practical efforts across major smart-grid areas while identifying remaining challenges to blockchain adoption.

  • Problem

    The smart grid’s growing distributed connections and centralized data systems create challenges for coordination, security, privacy, and trust during its move toward decentralization.

  • Method

    The paper conducts a comprehensive literature survey of blockchain and smart-grid research, reviews practical initiatives, and relates blockchain features to smart-grid requirements and challenges.

  • Results

    The survey catalogs blockchain contributions and practical initiatives across smart-grid applications, including metering, energy trading, cyber-physical systems, electric vehicles, and microgrids.

  • Takeaways & Limitations

    Blockchain-based smart-grid research offers opportunities for decentralized, secure, and automated energy networks, while further challenges remain before widespread implementation and adoption.

Abstract

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The concept of smart grid has been introduced as a new vision of the conventional power grid to figure out an efficient way of integrating green and renewable energy technologies. In this way, Internet-connected smart grid, also called energy Internet, is also emerging as an innovative approach to ensure the energy from anywhere at any time. The ultimate goal of these developments is to build a sustainable society. However, integrating and coordinating a large number of growing connections can be a challenging issue for the traditional centralized grid system. Consequently, the smart grid is undergoing a transformation to the decentralized topology from its centralized form. On the other hand, blockchain has some excellent features which make it a promising application for smart grid paradigm. In this paper, we aim to provide a comprehensive survey on application of blockchain in smart grid. As such, we identify the significant security challenges of smart grid scenarios that can be addressed by blockchain. Then, we present a number of blockchain-based recent research works presented in different literatures addressing security issues in the area of smart grid. We also summarize several related practical projects, trials, and products that have been emerged recently. Finally, we discuss essential research challenges and future directions of applying blockchain to smart grid security issues.

I. INTRODUCTION

The paper surveys how blockchain can support the smart grid’s shift toward decentralized operation while addressing security, privacy, and trust challenges. It reviews prior research, practical initiatives, and future directions for blockchain-enabled smart grids.

  • Motivation: The Energy Internet extends the smart grid with Internet, IoT, communication, power-system, and energy-network technologies to support interconnected energy interactions.It is also described as Internet of Energy or Smart Grid 2.0, with the aim of enabling energy connectivity anywhere and at any time.
  • Motivation: Growing distributed producers, consumers, electric vehicles, smart devices, and cyber-physical systems make coordination within the traditional centralized grid challenging.The paper identifies decentralization as a response to the costly and sophisticated communication infrastructure required for centralized management.
  • Blockchain Opportunity: Blockchain offers a decentralized alternative that manages shared blocks among network entities without requiring a central trusted authority.This feature motivates its application to security, privacy, and trust problems in decentralized smart grids.
  • Paper Contributions: The survey covers blockchain background, smart-grid applications, practical initiatives, and remaining research challenges and future directions.Its application coverage includes areas such as advanced metering infrastructure, energy trading, cyber-physical systems, electric vehicles, and microgrids.
  • Paper Contributions: The paper reviews blockchain-based smart-grid solutions, identifying investigated issues and the techniques used alongside blockchain.It also outlines smart-grid requirements and security, privacy, and trust objectives that blockchain may address.

II. BLOCKCHAIN BACKGROUND

This section introduces blockchain as a distributed ledger built from linked, replicated blocks, alongside smart contracts, blockchain categories, transaction modes, and consensus mechanisms.

  • DLT, Blockchain, and Smart Contract: Blockchain is a distributed ledger that records data or transactions in cryptographically linked and replicated blocks.Blocks may include timestamps, nonces, Merkle trees, and smart-contract scripts; hashes help verify integrity.
  • DLT, Blockchain, and Smart Contract: Smart contracts are blockchain-stored scripts that automatically execute agreement conditions when specified events or conditions are met.
  • Blockchain Categories: Blockchain categories distinguish participation and access, including permissioned versus permissionless and private versus public networks.Permissionless chains allow anyone to participate in block creation, whereas permissioned chains restrict participation to authorized nodes.
  • Blockchain Categories: On-chain transactions are recorded and broadcast across the network, while off-chain transactions move value outside the blockchain and can reduce cost and confirmation delay.Off-chain transactions also avoid miner or validator confirmation and do not publicly broadcast transaction details.
  • Consensus Mechanisms: Consensus mechanisms enable validators or miners to agree whether newly published blocks are valid.Public-chain consensus typically incurs higher computational costs, whereas private-chain mechanisms can be simpler because participants are trusted and limited.
  • Consensus Mechanisms: PoW validates blocks through computationally expensive puzzles, whereas PoS selects validators probabilistically according to their stake or assets.PoW can suffer from inefficient throughput, high latency, high energy consumption, and 51% attacks; PoS is intended to improve common PoW limitations.
  • Consensus Mechanisms: DPoS selects delegates to generate and validate blocks, while LPoS lets nodes lease assets to increase validator participation and reduce dominance by one group.
  • Consensus Mechanisms: PoAc combines PoW-based mining for initial security with PoS-based block publication after miners accumulate sufficient assets.

III. BLOCKCHAIN IN SMART GRID

This section frames blockchain in smart grids by describing the future grid architecture and the blockchain features and security objectives relevant to that application.

  • The section first describes the future smart grid, then explains blockchain features and the security, privacy, and trust objectives they may address.

A. Moving towards Decentralized Smart Grid System

The paper presents the Energy Internet as a more interconnected evolution of the smart grid while identifying centralized coordination and security concerns that motivate blockchain-based decentralization.

  • Moving towards Decentralized Smart Grid System: The smart grid modernizes the legacy grid through digital computation, communication, control, and metering to integrate renewable and distributed energy resources.
  • Moving towards Decentralized Smart Grid System: The Energy Internet integrates information, energy, and economics and connects resources such as microgrids, storage, electric vehicles, prosumers, and energy markets.
  • Moving towards Decentralized Smart Grid System: Centralized topology makes generation, delivery, markets, and smart-grid interactions dependent on intermediary entities that monitor, collect, and process information.
  • Moving towards Decentralized Smart Grid System: The grid is moving toward decentralized and automated operation to increase dynamic interaction among its components and support the Energy Internet's connectivity and accessibility.
  • Security, Privacy, and Trust Objectives: Future smart grids must protect information and communications against unauthorized access, disclosure, and modification while supporting authorized access.
  • Blockchain Features: Blockchain offers decentralization, peer-to-peer operation, scalability, cryptographic security, immutability, transparency, auditability, resiliency, and automated smart-contract execution.Its distributed architecture avoids a single point of failure, while replicated records support verification and recovery from faults or malicious activity.
  • Blockchain Features: Smart contracts stored on blockchain can execute predefined actions automatically without human intervention, brokers, or central authorization.
  • Security, Privacy, and Trust Objectives: The paper summarizes common smart-grid security, privacy, and trust objectives and maps them to ways blockchain can address them.

IV. BLOCKCHAIN CONTRIBUTIONS IN SMART GRID

This section surveys blockchain contributions across smart-grid applications, emphasizing security challenges, decentralized coordination, and smart-contract-based automation. It covers advanced metering, demand response, edge-assisted architectures, and privacy-preserving energy scheduling.

  • Scope: The survey organizes blockchain solutions around smart-grid security, privacy, and trust challenges across several application domains.The domains include advanced metering infrastructure, decentralized energy trading, cyber-physical systems, electric-vehicle management, and microgrids.
  • Advanced Metering Infrastructure: Centralized metering storage creates risks of data modification, privacy leakage, single-point failure, limited scalability, reduced availability, and delayed response.Smart meters generate extensive payment and energy-usage records that are shared for monitoring, billing, and trading.
  • Advanced Metering Infrastructure: A blockchain-and-smart-contract model places contracts between energy consumers and producers to reduce transaction costs, improve transaction rates, and secure transactions.The smart meter sends transaction records to the blockchain, enabling consumer charges based on recorded data.
  • Advanced Metering Infrastructure: Blockchain and smart contracts can record smart-meter data on a tamper-proof ledger and automate demand-response validation, incentives, penalties, and energy balancing.The model in was prototyped on Ethereum using UK building energy traces and tested for near-real-time demand adjustment.
  • Advanced Metering Infrastructure: The edge-assisted approach uses a permissioned blockchain with edge devices, super nodes, and smart-contract servers to support privacy, decentralized storage, and trustworthy participation.Super nodes authorize identities before voting, while contract servers attach contract scripts to blocks; compromising a super node raises an integrity concern.
  • Advanced Metering Infrastructure: PPES applies blockchain and smart contracts to address privacy concerns associated with centralized energy-service companies handling financial and behavioral information.The model is designed for distributed energy-market scheduling and uses Lagrangian relaxation for decomposition.

B. Blockchain in Decentralized Energy Trading and Market

Blockchain-based energy trading research targets decentralized peer-to-peer exchange among consumers, producers, and prosumers, including energy from microgrids, electric vehicles, and storage. Proposed systems combine consortium blockchains, smart contracts, tokens, cryptography, and alternative consensus mechanisms to support security, privacy, and trading efficiency.

  • Energy Trading Motivation: Distributed energy trading enables consumers, producers, and prosumers to exchange local or surplus energy from microgrids, electric vehicles, and storage units.The stated benefits include reducing load peaks and transmission losses while balancing supply and demand.
  • Blockchain-Based Trading Systems: The consortium-blockchain energy coin system combines P2P trading, credit-based payments, and Stackelberg game theory across energy harvesting, microgrid, and vehicle-to-grid scenarios.The credit-based scheme addresses transaction-confirmation delays associated with proof-of-work systems.
  • Blockchain-Based Trading Systems: PriWatt combines blockchain-assisted smart contracts, multisignatures, and anonymous encrypted messaging to protect transaction security and user-identity privacy.Its multisignature scheme protects against theft, while proof of work is used for consensus and mitigation of Byzantine failures and double spending.
  • Blockchain-Based Trading Systems: The proposed consortium-blockchain power-trading approach replaces expensive proof of work with proof of stake and encrypts sensor-collected user data before authorized-node storage.It also uses pseudonyms, smart contracts, and cryptographic mechanisms for flexible, privacy-preserving trading.
  • Vehicle-to-Grid Trading: Blockchain and elliptic-curve cryptography support hierarchical authentication for anonymous electric vehicles and mutual authentication among vehicles, aggregators, and charging stations.The mechanism is intended for security and privacy in distributed vehicle-to-grid energy trading.
  • Crowdsourced Energy Systems: A crowdsourced energy-system framework automates peer-to-peer energy sharing, electric-vehicle charging and discharging, load deferral, and renewable-energy connections at the distribution level.Distributed blockchain implementations and smart meters support these operational tasks.

C. Use of Blockchain to Monitor, Measure, and Control

This section examines blockchain for monitoring, measurement, and control in smart-grid cyber-physical systems and electric-vehicle ecosystems. The surveyed architectures distribute storage, authentication, charging coordination, bidding, and operational control while targeting transparency, security, privacy, and resilience.

  • Cyber-Physical Monitoring: Traditional smart-grid cyber-physical systems rely mainly on centralized SCADA architectures that hierarchically connect monitoring, measurement, and control components.Sensors and intelligent electronic devices report status information through remote terminal units to central repositories.
  • Cyber-Physical Monitoring: ICS-BlockOpS applies blockchain to industrial-control operational data, targeting immutability through tamper-proof records and redundancy through blockchain-assisted storage.The architecture addresses two stated ICS issues: immutability and redundancy.
  • Cyber-Physical Monitoring: A blockchain-and-smart-contract monitoring system uses smart meters, consensus nodes, and utility companies to support transparent and secure energy-consumption data.The work lacks practical evaluation of its security measures and performance efficiencies.
  • Cyber-Physical Monitoring: A five-layer blockchain-assisted architecture collects and preprocesses sensor data, performs cryptographic operations, generates distributed-ledger blocks, stores synchronized chains, and provides monitoring and failure-prediction services.The architecture was implemented on an automatic production platform, where experiments compared it with a traditional architecture.
  • Electric-Vehicle Management: Electric vehicles support vehicle-to-vehicle, vehicle-to-grid, and grid-to-vehicle exchange, contributing to demand response, grid resilience, and load-peak reduction.They can function as energy-storage devices while exchanging energy with the grid, charging stations, and neighboring vehicles.
  • Electric-Vehicle Management: Permissioned blockchain systems coordinate renewable-energy charging through optimal contracts, energy allocation, and delegated Byzantine fault tolerance among selected electric vehicles.The contracts let vehicles choose energy sources according to preferences while the allocation method distributes limited renewable energy.
  • Electric-Vehicle Management: Blockchain-based charging coordination schedules storage-unit requests using smart-contract scripts, state-of-charge information, and a Knapsack-derived priority index.Higher-priority units charge in current time slots, while lower-priority requests are delayed; the mechanism also preserves identities and rejects malicious requests.
  • Electric-Vehicle Management: A lightning-network and blockchain model registers electric vehicles, charging piles, and operators to establish trust and secure funds and payments during charging management.The model subsequently introduces scheduling strategies for charging operations.

E. Use of Blockchain in Microgrid

Microgrids use blockchain and smart contracts to decentralize control, support energy transactions, and address voltage regulation and trust problems. The surveyed solutions span research approaches, practical initiatives, and design considerations.

  • Microgrids integrate distributed energy resources, battery storage, electric vehicles, appliances, and loads near generation units.
  • Blockchain architectures decentralize microgrid operation by distributing operator responsibilities and supporting energy trading without a utility or microgrid operator.
  • Blockchain stores contracts, DER credit status, and participant histories, while smart contracts enforce proportional fairness in voltage-regulation services.
  • Continuous double auctions and blockchain support independent, direct P2P energy transactions between distributed generators and consumers.
  • The surveyed blockchain solutions use blockchain for data recording and smart contracts for automation across five smart-grid application areas.
  • Designs should balance energy efficiency, decentralization, security, privacy, efficiency, scalability, application needs, and practical validation.

A. Cryptocurrency Initiatives

Cryptocurrency initiatives apply blockchain and smart contracts to renewable-energy incentives, green-energy payments, and local energy markets. The initiatives differ in their energy focus, trading model, and currency design.

  • SolarCoin rewards solar producers with 1 SolarCoin per 1 MWh of generated solar energy.
  • SolarCoin uses Proof of Stake Time, which consumes less than 0.001% of the power consumption of Proof of Work at analogous scales.
  • NRGcoin supports renewable and clean resources rather than focusing only on solar energy or functioning solely as a cryptocurrency.
  • NRGcoin uses an Ethereum smart contract, a currency market, and gateway devices to connect green-energy production, payments, and electricity measurements.
  • 1 NRGCoin corresponds to 1 kWh of produced energy regardless of the electricity price when the energy is traded.
  • An immutable blockchain-assisted smart contract administers green-energy disbursement, while gateway devices calibrate electricity inflows and outflows.

3) Electronic Energy Coin:

Electronic Energy Coin, KWHCoin, TerraGreen Coin, Charg Coin, and CyClean Coin illustrate blockchain-based initiatives for clean-energy exchange, biomass utilization, EV charging, and emissions reduction.

  • Electronic Energy Coin is an ERC-20 Ethereum token for a green-energy buying and selling platform emphasizing secure, anonymous, fair, and proper distribution.
  • KWHCoin combines a blockchain-based cryptocurrency and community with a platform for connecting energy producers and consumers.
  • TerraGreen Coin uses blockchain, cryptocurrency, biomass waste conversion, decentralized payments, Proof of Stake, and sidechains for renewable-energy projects.
  • Charg Coin supports crowdsourced EV charging-station distribution, allowing peer energy trading within one second and enabling instant micro-transactions through a second-layer blockchain.
  • CyClean Coin uses Ethereum smart contracts and an alternative mining technique intended to make mining environmentally friendly.

B. Blockchain Platforms

Blockchain platforms target energy-sector data sharing, renewable-energy markets, microgrids, and distributed applications through varied governance, token, and consensus designs. The surveyed platforms emphasize transparency, scalability, energy efficiency, and stakeholder participation.

  • Pylon Network is an open-source blockchain platform designed for energy-sector prosumer participation, digitalization, decentralization, and cooperation.
  • Pylon Network shares granular consumer data with retailers and ESCOs, while Pylon Tokens support engagement and Pylon Coins reward validating nodes.
  • Pylon Network uses cooperative rather than competitive mining to reduce per-transaction energy consumption and hardware cost.
  • Exergy is a permissioned microgrid data platform providing a local energy marketplace across existing grid infrastructure.
  • Energy Web Chain is a public, permissioned Proof of Authority blockchain with high transaction throughput and an open-source development toolkit.
  • Sunchain uses a tokenless consortium blockchain to support community energy sharing, origin certification, consumption traceability, trust, and scalability.

6) Dajie Blockchain Platform:

The survey reviews blockchain-based smart-grid initiatives spanning microgrid energy sharing, renewable-energy incentives, local trading, and energy-management markets. These platforms use blockchain, tokens, smart contracts, IoT, and related technologies to support decentralized services and transactions.

  • Dajie Blockchain Platform: Dajie enables microgrid community members to share energy peer-to-peer through IoT devices and blockchain.Users install an IoT device to access the platform’s energy coin and related facilities.
  • Dajie Blockchain Platform: Small consumers and prosumers can reclaim carbon credits through Dajie’s energy coin.
  • Greeneum: Greeneum combines machine learning, blockchain, smart contracts, and IoT to support renewable-energy DApps, incentives, and carbon-reduction credits.It targets regional, community-based production and distribution through an integrated secure and decentralized solution.
  • Greeneum: Greeneum uses Green tokens for renewable-energy recording, management, trading, exchange, and rewards, while Greeneum bonds and carbon credits reward producers.Consumers can directly pay producers through Green tokens.
  • SunContract: SunContract connects independent local producers and consumers to a decentralized energy market and has reduced electricity costs for Slovenian households.It also supports clean-energy selection and local energy trading without a monopoly.
  • SunContract: SunContract provides auditable production and consumption insights, while smart-contract transparency removes intermediaries used to establish transaction trust.
  • WePower: WePower combines blockchain tokens, energy-use tools, renewable-producer discovery, digital contracting, generation monitoring, and PPAs for direct energy transactions.Its market also lets smaller companies aggregate with larger companies or with one another, sharing opportunities and risks.
  • Practical Initiatives: The surveyed initiatives mainly focus on energy trading through public blockchains, creating privacy concerns when user information is stored publicly.The survey therefore places privacy protection for energy producers and consumers among the priorities.

VI. RESEARCH CHALLENGES AND FUTURE DIRECTIONS

The survey identifies throughput, decentralization, consensus, device-resource, and protocol-design challenges that must be addressed before blockchain can be widely implemented in smart grids. It presents these challenges as directions for future research.

  • Future Directions: The survey frames unresolved blockchain-adoption limitations as challenges to address before widespread smart-grid implementation.It presents six points as future research directions for integrating blockchain with smart grids.
  • Throughput: Low blockchain throughput challenges real-time transactions and micropayments, while smart grids may generate substantial financial and non-financial transaction volumes.Addressing throughput is described as important for building decentralized smart-grid networks.
  • Throughput: Private blockchains can improve transaction speed but cannot provide total decentralization under centralized control.The survey calls for evaluating the tradeoff between decentralization and transaction speed.
  • Throughput: Off-chain transactions can execute instantly and at lower cost, but off-chain techniques remain immature and require further smart-grid research.
  • Consensus Mechanisms: Proof of Work consumes substantial energy, Proof of Stake has a rich-rule problem, and BFT mechanisms do not suit extensive public blockchains with many participants.Further research is needed to improve consensus mechanisms for smart-grid applications.
  • Consensus Mechanisms: Resource-constrained smart devices cannot meet the computational demands of consensus, motivating research into edge-computing-assisted mechanisms.
  • Consensus Mechanisms: Popular consensus mechanisms are largely single-purpose designs for cryptocurrency, so smart-grid and other non-cryptocurrency applications may require different mechanisms.

3) Blockchain and Smart Contract Security:

The survey examines security, privacy, incentive, interoperability, and scalability issues in blockchain-based smart grids. It concludes that blockchain offers promising decentralized communication, while significant implementation challenges remain.

  • Security: Public blockchains face more security problems than private blockchains, and smart contracts may expose vulnerabilities through coding bugs and malicious attacks.
  • Privacy: Blockchain transparency can expose energy consumption, production, usage patterns, assets, and records, potentially revealing users’ real identities.
  • Privacy: Multichain smart-grid platforms complicate security and privacy because transactions and data exchanges cross different chains and off-chains.Cryptographic schemes can limit access and exposure, but adapting them across scenarios remains challenging.
  • Cryptographic Solutions: Blockchain smart-grid applications need cryptographic schemes that preserve scalability and efficiency without relying on centralized trusted entities.Designing schemes adapted to different smart-grid scenarios requires further research.
  • Standards and Interoperability: Smart-grid implementations still lack widely accepted standards, limiting interoperability among smart meters, IoT devices, cyber-physical systems, EVs, and other entities.
  • Conclusion: The survey identifies blockchain as promising for decentralized smart-grid communication without central authorities or intermediaries, while outlining challenges for future research.
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