Blockchain Solution for Buildings’ Multi-Energy Flexibility Trading Using Multi-Token Standards

Abstract

Buildings can become a significant contributor to an energy system’s resilience if they are operated in a coordinated manner to exploit their flexibility in multi-carrier energy networks. However, research and innovation activities are focused on single-carrier optimization (i.e., electricity), aiming to achieve Zero Energy Buildings, and miss the significant flexibility that buildings may offer through multi-energy coupling. In this paper, we propose to use blockchain technology and ERC-1155 tokens to digitize the heat and electrical energy flexibility of buildings, transforming them into active flexibility assets within integrated multi-energy grids, allowing them to trade both heat and electricity within community-level marketplaces. The solution increases the level of interoperability and integration of the buildings with community multi-energy grids and brings advantages from a transactive perspective. It permits digitizing multi-carrier energy using the same token and a single transaction to transfer both types of energy, processing transaction batches between the sender and receiver addresses, and holding both fungible and non-fungible tokens in smart contracts to support energy markets’ financial payments and energy transactions’ settlement. The results show the potential of our solution to support buildings in trading heat and electricity flexibility in the same market session, increasing their interoperability with energy markets while decreasing the transactional overhead and gas consumption.

Review of Blockchain Tokens Creation and Valuation

“…While FTs can be interchanged, in the same way as money, since they all have the same value, this is not the case for unique NFTs. For more flexibility, the third approach suggests the option of interchangeability, also named semi-FTs or hybrid FTs, meaning that, in specific scenarios, they are alike while in others they are unique [46,57,97]. Additionally, some authors also split tokens based on transaction mechanism purposes, in distributed computation tokens, utility tokens (programmable blockchain asset), security token, FT, NFT [25], and stablecoin [33].…”

“…Tokenization on blockchain means that a specific asset can be linked to it, such as the energy or the flexibility for producing and consuming energy. Marin et al [57] used two kinds of tokens, one for monetary value that was fungible and one for energy certification that was non-fungible. Bongini et al [43] used topic modeling to identify the themes in white papers regarding STOs.…”

“…There are two areas of interest for tokens in the energy sectors: the ability to trade energy in a community and tracking renewable energy. In Buccafurri et al [77], the authors propose an architecture based on redeeming tokens for energy while incorporating not only the prosumers and consumers, as in Marin et al [57] and Toderean et al [58] but also the retailers, entrusted by the energy authority, capable of selling and buying energy and responsible also for connecting the consumers to the network. However, the authors mention the inability to fully trust the retailer, with a solution of creating a dispute with the energy authority.…”

Proof of Flow: A Design Pattern for the Green Energy Market

“…The growing adoption of Distributed Energy Resources (DERs), such as small-scale green energy producers that feed into the main grid energy gathered by photovoltaic power plants or small wind turbines, has given rise to Aggregators, a new category of energy players in electricity markets [1][2][3]. Aggregators play a crucial role by ensuring fair and reliable compensation for the energy supplied by DERs and facilitating the seamless integration of intermittent energy production from renewable sources into the distribution network [4].…”