IEEE Systems, Man and Cybernetics Magazine - January 2023 - 40

technologies can connect together. From the power systems
perspective, digitalization is important for two reasons: 1)
load shifting and managing energy demand and 2) smallscale
energy producers can sell energy to others easily. In
this regard, utilities and power grid
operators should use digital tools
and smart metering devices, which
make it possible to add new features
to the existing infrastructure. The
use of IoT technology in the energy
sector is a great example of digitalization
in power systems. The major
area where IoT technology deals
with energy-management systems is
the smart grid. The IoT technology
speeds up the sensing and information
exchange among all of the integrated
components of power
systems by which it is possible to
effectively monitor 1) the resilience
of power transmission lines, 2) the stability and control of
power grids operation, and 3) the reduction in economic
loss, and also prevent possible damage due to natural disasters.
Particularly in the power market, IoT technology improvises
analytics-based decision-making by diminishing the
threats and vulnerabilities of the market through the use of
efficient tools and techniques. In addition, the adoption of
IoT solutions can improve the operational efficiency of fossil
fuel-based power generation units, thus, helping companies
in this industry to sustain the drop in their prices. For
instance, IoT solutions can be deployed for remote monitoring
of oil infrastructure and maintaining pipeline integrity,
and help detect potential accidents.
Except for the IoT technology, there are various technologies
for power market development, such as digital
twin, artificial intelligence, cloud computing, and blockchain
technology. In particular, digital twin technology
enables smarter management of the sector's energy
resources. With this technology, power grid operators can
manipulate the conditions of digital assets for scenario
planning without interfering with the operation of physical
Electricity
Delivery
(1)
Initiating a
Transaction
(2)
Verification by
Network
y
(3)
Compared to the fossil
fuel-based power
generation units,
the cost of power
generation by RESs is
relatively higher than
the market prices.
assets [6]. On the other side, errors, anomalies, and attacks
can be detected and identified using artificial intelligence.
The cloud can enhance big data analysis, and power grid
operators can gather and assess a large amount of information.
From the smart grid point
of view, with the help of cloudbased
computing, the data can be
segre gated. The cutting-edge technology
is block chain by which the
power grid operator can gain market
sustainability. Blockchain is a
transparent and secure system
and is capable of enabling business
solutions, especially when combined
with smart contracts. The
consensus-based decision-making
process in blockchain technology
is a key factor for wider recognition,
but this technology has not
been yet widely used-perhaps
due to its compl exity. With the help of blockchain, the data
exchange can be fully secured. The adoption of blockchain
technology highly depends on the participants in power
markets, and their experiences can be used to widely
focus more on this technology.
This article aims at providing an overview of the fundamental
aspects of blockchain technology and its functionality
in modern power systems and identifying the role of
this technology in the future of transactive power systems.
Blockchain Technology
in the Energy Sector
(5)
Transaction
Completed
(4)
Adding to
Chain
Transaction
Approved
Figure 2. The principle operation of blockchain technology.
40 IEEE SYSTEMS, MAN, & CYBERNETICS MAGAZINE January 2023
Principle Operation
of Blockchain Technology
A blockchain is a distributed database that is continuously
updated and verified by its users. Each added
block of data is chained and becomes part of a growing
list of records, under the surveillance of network members.
This technology enables the transfer of assets and
the recording of transactions through a secure database
[7], [8]. Figure 2 shows the principle operation
of blockchain technology. As shown
in this figure, blockchain starts with a
transaction. The first block contains the
content hash, ownership, modification
history, etc. Then, the transaction, i.e.,
block, is publicly broadcasted to a network
of nodes and the network validates
the transaction using known algorithms,
e.g., consensus mechanisms. Thereafter,
the transaction is unified with other
transactions as a block of data, and the
new block is added to the blockchain in a
transparent and unalterable way. Finally,
the transaction is complete, and this
IEEE Systems, Man and Cybernetics Magazine - January 2023

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