New review highlights the potential of smart contracts as a game-changing technology for the energy sector

Energy systems are undergoing rapid changes, required to accommodate an increasing amount of renewable energy sources, as well as new types of loads, such as those from decarbonised transport. Moreover, energy becoming more decentralised, with many prosumers - consumers with their own generation and storage - taking control of their own generation, rather than being passive customers of large utility companies. Yet, these changes require new technologies to enable this energy revolution, such as those from distributed AI, multi-agent systems or blockchain-enabled systems.

One such key technique that will prove increasingly important going forward is smart contracts. Smart contracts enable individual energy prosumers to coordinate their generation and consumption in a distributed way, without relying on a central authority to record the transactions. Due to their self-executing, customisable and tamper-proof nature, they are seen as a key technology for enabling the transition to a more efficient, transparent and transactive energy system.

A major systematic review of the potential of smart contracts in energy systems was recently published in the top-ranked Elsevier journal Renewable and Sustainable Energy Reviews by a team from Heriot-Watt University in Edinburgh, University of Edinburgh, CWI, National Center for Mathematics and Computer Science in Amsterdam, as well as a team at the Pontificial University in Santiago, Chile.

The lead author, Desen Kirli, researcher at the University of Edinburgh said: “Our study is the most comprehensive review of smart contracts in energy. It draws insights from 178 peer-reviewed scientific articles, as well as 13 industrial and demonstration projects that use this technology. The article discusses the applications of smart contracts into a number of smart fields in energy, including: smart electric vehicle charging, automated demand-side response, peer-to-peer energy trading and allocation of the control duties among the network operators. We develop a 6-layer architecture to classify the features that need to be considered when applying smart contracts in energy systems.”

Dr. Benoit Couraud, research fellow at Heriot-Watt University added: “Community energy and microgrids are an increasingly important part of energy systems, as also highlighted by our work in the Responsive Flexibility smart energy project in the Orkney Islands (UK), and the Community Energy Demand Reduction in India project. Smart contracts, along AI techniques are an important technology that can enable prosumers in such communities to trade energy with each other, as well as participate in the flexibility provision to the larger energy system.”

Dr. Valentin Robu, Associate Professor, concludes: “Our team effort resulted in a comprehensive study of smart contracts - a technology that has attracted increasing interest recently from the energy community, both from academia and industry. We aim to provide a timely review of the state of the art accessible to a wide audience. Our study presents not only the potential advantages of smart contracts, but also some of the pitfalls and issues that parties interested in developing the technology need to pay attention to, such as security risks, computation costs or the carbon footprint of deploying blockchain-enabled smart contracts”.

ENDS