IEEE Systems, Man and Cybernetics Magazine - January 2023 - 46

modern power systems. It is well-known that traditional
wholesale power markets operate in 15-min intervals. By
moving over time to more DG assets that are interacting at
smaller time intervals, it is compulsory to be able to scale
the IT architecture while maintaining the security and reliability
of power grids [18]. Another requirement is to build
in the ability for private transactions to be validated on
blockchain without sharing sensitive information with the
general public [19]. In addition, the integration of largescale
power plants and billions of IoT devices can potentially
cause injecting bad data into the IT system. Hence, it
is vital to securely connect all of the different assets to
ensure that the information on blockchain is actually correct
[20]. Using tokens is a way to secure the operation of
blockchain. Tokens for the energy blockchain can be used
to secure and pay for the transactions on blockchain [4].
Furthermore, token-curated registries can ensure how to
create a list of databases of verifiable assets so that
different utilities, energy companies, or app developers,
who want to build apps, can ensure such resources are
connected to blockchain or legitimate [4].
--- Electricity
--- Payment
--- Data
GENCOs
Grid
Operators
Retailers
Meter
Operators
Residential
Customer
Storage
RESs
(a)
GENCOs
Storage
RESs
Banks
Industrial
Customer
Traders
Limitations of Blockchain Technology
Apart from the benefits of blockchain technology, there
are some concerns about its limitations. Excessive energy
consumption is one of the important limitations of blockchain
technology. Blockchains consume too much energy.
A large amount of energy consumption depends on the
decision on how the particular blockchain is. For
instance, Bitcoin networks run based on the PoW algorithm,
which consumes excessive energy. To resolve this
issue, other consensus mechanisms, such as PoS and PoA,
can be used for much faster performance and muchreduced
energy consumption [10]. There are some concerns
about the limitations of throughput for the energy
industry in the medium to long term. Such an issue can be
resolved by determining the current range of blockchain
applications for the energy sector. Although security is
one of the benefits of blockchain technology, privacy in
private blockchain is a major concern [21]. Particularly in
the energy sector, maintaining the privacy of private
transactions is crucial. To deal with such an issue, using
public blockchain networks can be a promising solution.
Grid
Operators
Blockchain
Trading Platform
Residential
Customer
(b)
Figure 8. Power market structures: (a) traditional
wholesale power market and (b) blockchain-based
power market.
46 IEEE SYSTEMS, MAN, & CYBERNETICS MAGAZINE January 2023
Industrial
Customer
Conclusion
This article presents an overview of the fundamental
aspects of blockchain technology and its functionality in
modern power systems and identifies the future of transactive
power systems using blockchain technology. It is clear
that blockchain has great potential in the energy sector,
especially in virtual peer-to-peer energy trading, EV charging,
demand response, and virtual power plants. Blockchain
technology is not yet quite mature and requires
further investigation. The majority of blockchain projects
are industry-related and there is limited research work in
this area. However, there have been good attempts toward
using blockchain technology in the energy sector. Many
blockchain applications are still in their pilot stages and
governments are collaborating with technology firms to
determine if blockchain can be used to solve persistent
problems, such as traceability, identification, and trust. In
addition, it is mandatory to define guidelines, laws, and regulations
related to blockchain so that everyone can refer to
them. It should be noted that privacy, decentralized society
and decentralized organization, technical complexity, connectivity
and power dependence, computation time, cost of
implementation, and finally secure integration, are the
long-term consequences of using blockchain technology.
About the Authors
Fazel Mohammadi (fazel@uwindsor.ca) earned his doctorate
degree in electrical engineering from the University
of Windsor. He is with the Department of Electrical and
Computer Engineering, University of Windsor, Windsor, ON
IEEE Systems, Man and Cybernetics Magazine - January 2023

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