The transition towards a more decarbonised, resilient and distributed energy system requires local initiatives, such as Smart Local Energy Systems (SLES), which lead communities to gain self-sufficiency and become electricity islands. Although many SLES projects have been recently deployed, only a few of them have managed to be successful, mostly due to an initial knowledge gap in the SLES planning and deployment phases. This paper leverages the knowledge from the UK's largest SLES demonstrator in the Orkney Islands, named the Responsive FLEXibility (ReFLEX) project, to propose a framework that will help communities to successfully implement a SLES. First, this paper describes how the multi-services electrical SLES implemented in Orkney reduces the impact of the energy transition on the electrical infrastructure. We identify and discuss the main enablers and barriers to a successful SLES, based on a review of SLES projects in the UK. Second, to help future communities to implement SLES, we extend the Smart Grid Architecture Model (SGAM) into a comprehensive multi-vector Smart Local Energy Architecture Model (SLEAM) that includes all main energy services, namely power, heat and transport. This extended architecture model describes the main components and interaction layers that need to be addressed in a comprehensive SLES. Next, to inform successful deployment of SLES, an extensive list of key performance indicators for SLES is proposed and implemented for the ReFLEX project. Finally, we discuss lessons learnt from the ReFLEX project and we list required future technologies that enable communities, energy policy makers and regulatory bodies to best prepare for the energy transition.@en

Given the ongoing transition towards a more decentralised and adaptive energy system, the potential of blockchain-enabled smart contracts for the energy sector is being increasingly recognised. 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 market. The applications of smart contracts include coordination of smart electric vehicle charging, automated demand-side response, peer-to-peer energy trading and allocation of the control duties amongst the network operators. Nevertheless, their use in the energy sector is still in its early stages as there are many open challenges related to security, privacy, scalability and billing. In this paper, we systematically review 178 peer-reviewed publications and 13 innovation projects, providing a thorough analysis of the strengths and weaknesses of smart contracts used in the energy sector. This work offers a broad perspective on the opportunities and challenges that stakeholders using this technology face, in both current and emergent markets, such as peer-to-peer energy trading platforms. To provide a roadmap for researchers and practitioners interested in the technology, we propose a systematic model of the smart contracting process, by developing a novel 6-layer architecture, as well as presenting a sample energy contract in pseudocode form and as open-source code. Our analysis focuses on the two mainstream application areas we identify for smart contract use in this area: energy and flexibility trading, and distributed control. The paper concludes with a comprehensive, critical discussion of the advantages and challenges that must be addressed in the area of smart contracts and blockchains in energy, and a set of recommendations that researchers and developers should consider when applying smart contracts to energy system settings.@en

Peer-to-peer, community or collective self-consumption, and transactive energy markets offer new models for trading energy locally. Over the past five years, there has been significant growth in the amount of academic literature examining how these local energy markets might function. This systematic literature review of 139 peer-reviewed journal articles examines the market designs used in these energy trading models. A modified version of the Business Ecosystem Architecture Modelling framework is used to extract market model information from the literature, and to identify differences and similarities between the models. This paper examines how peer-to-peer, community self-consumption and transactive energy markets are described in current literature. It explores the similarities and differences between these markets in terms of participation, governance structure, topology, and design. This paper systematises peer-to-peer, community self-consumption and transactive energy market designs, identifying six archetypes. Finally, it identifies five evidence gaps which require future research before these markets could be widely adopted. These evidence gaps are the lack of: consideration of physical constraints; a holistic approach to market design and operation; consideration about how these market designs will scale; consideration of information security; and, consideration of market participant privacy.@en

Blockchains or distributed ledgers are an emerging technology that has drawn considerable interest from energy supply firms, startups, technology developers, financial institutions, national governments and the academic community. Numerous sources coming from these backgrounds identify blockchains as having the potential to bring significant benefits and innovation. Blockchains promise transparent, tamper-proof and secure systems that can enable novel business solutions, especially when combined with smart contracts. This work provides a comprehensive overview of fundamental principles that underpin blockchain technologies, such as system architectures and distributed consensus algorithms. Next, we focus on blockchain solutions for the energy industry and inform the state-of-the-art by thoroughly reviewing the literature and current business cases. To our knowledge, this is one of the first academic, peer-reviewed works to provide a systematic review of blockchain activities and initiatives in the energy sector. Our study reviews 140 blockchain research projects and startups from which we construct a map of the potential and relevance of blockchains for energy applications. These initiatives were systematically classified into different groups according to the field of activity, implementation platform and consensus strategy used.1 Opportunities, potential challenges and limitations for a number of use cases are discussed, ranging from emerging peer-to-peer (P2P) energy trading and Internet of Things (IoT) applications, to decentralised marketplaces, electric vehicle charging and e-mobility. For each of these use cases, our contribution is twofold: first, in identifying the technical challenges that blockchain technology can solve for that application as well as its potential drawbacks, and second in briefly presenting the research and industrial projects and startups that are currently applying blockchain technology to that area. The paper ends with a discussion of challenges and market barriers the technology needs to overcome to get past the hype phase, prove its commercial viability and finally be adopted in the mainstream.@en

The authors regret that there were developments in affiliations and funding acknowledgements during the time from initial submission to final acceptance which have not been reported correctly. Specifically, the affiliations of the co-authors R. Chitchyan, M. Montakhabi, M. Andoni, and I. Scott were not up to date. The corrected affiliations of all authors are as follows. Concerning funding acknowledgements, the information of M. Andoni, V. Robu, and I.J. Scott were not up to date. In addition to the provided information, the following to fundings should be acknowledged. Merlinda Andoni received funding from the EPSRC DecarbonISation PAThways for Cooling and Heating (DISPATCH) project (grant number EP/V042955/1) and the InnovateUK Responsive Flexibility (ReFLEX) project [ref: 104780]. Valentin Robu was supported by the project “TESTBED2: Testing and Evaluating Sophisticated information and communication Technologies for enaBling scalablE smart griD Deployment”, funded by the European Union Horizon2020 Marie Skłodowska-Curie Actions (MSCA) [Grant agreement number: 872172]. Ian Scott was supported by national funds through FCT (Fundação para a Ciência e a Tecnologia), under the project - UIDB/04152/2020 - Centro de Investigação em Gestão de Informação (MagIC)/NOVA IMS. The authors would like to apologise for any inconvenience caused.@en

The authors regret that there were developments in affiliations and funding acknowledgements during the time from initial submission to final acceptance which have not been reported correctly. Specifically, the affiliations of the co-authors R. Chitchyan, M. Montakhabi, M. Andoni, and I. Scott were not up to date. The corrected affiliations of all authors are as follows. Concerning funding acknowledgements, the information of M. Andoni, V. Robu, and I.J. Scott were not up to date. In addition to the provided information, the following to fundings should be acknowledged. Merlinda Andoni received funding from the EPSRC DecarbonISation PAThways for Cooling and Heating (DISPATCH) project (grant number EP/V042955/1) and the InnovateUK Responsive Flexibility (ReFLEX) project [ref: 104780]. Valentin Robu was supported by the project “TESTBED2: Testing and Evaluating Sophisticated information and communication Technologies for enaBling scalablE smart griD Deployment”, funded by the European Union Horizon2020 Marie Skłodowska-Curie Actions (MSCA) [Grant agreement number: 872172]. Ian Scott was supported by national funds through FCT (Fundação para a Ciência e a Tecnologia), under the project - UIDB/04152/2020 - Centro de Investigação em Gestão de Informação (MagIC)/NOVA IMS. The authors would like to apologise for any inconvenience caused.@en

The authors regret that there were developments in affiliations and funding acknowledgements during the time from initial submission to final acceptance which have not been reported correctly. Specifically, the affiliations of the co-authors R. Chitchyan, M. Montakhabi, M. Andoni, and I. Scott were not up to date. The corrected affiliations of all authors are as follows. Concerning funding acknowledgements, the information of M. Andoni, V. Robu, and I.J. Scott were not up to date. In addition to the provided information, the following to fundings should be acknowledged. Merlinda Andoni received funding from the EPSRC DecarbonISation PAThways for Cooling and Heating (DISPATCH) project (grant number EP/V042955/1) and the InnovateUK Responsive Flexibility (ReFLEX) project [ref: 104780]. Valentin Robu was supported by the project “TESTBED2: Testing and Evaluating Sophisticated information and communication Technologies for enaBling scalablE smart griD Deployment”, funded by the European Union Horizon2020 Marie Skłodowska-Curie Actions (MSCA) [Grant agreement number: 872172]. Ian Scott was supported by national funds through FCT (Fundação para a Ciência e a Tecnologia), under the project - UIDB/04152/2020 - Centro de Investigação em Gestão de Informação (MagIC)/NOVA IMS. The authors would like to apologise for any inconvenience caused.@en

With increasing decarbonisation and accessibility to our energy systems and markets, there is a need to understand and optimise the value proposition for different stakeholders. Game-theoretic models represent a promising approach to study strategic interactions between self-interested private energy system investors. In this work, we design and evaluate a game-theoretic framework to study strategic interactions between profit-maximising players that invest in network, renewable generation and storage capacity. Specifically, we study the case where grid capacity is developed by a private renewable investor, but line access is shared with competing renewable and storage investors, thus enabling them to export energy and access electricity demand. We model the problem of deducing how much capacity each player should build as a non-cooperative Stackelberg-Cournot game between a dominant player (leader) who builds the power line and renewable generation capacity, and local renewable and storage investors (multiple followers), who react to the installation of the line by increasing their own capacity. Using data-driven analysis and simulations, we developed an empirical search method for estimating the game equilibrium, where the payoffs capture the realistic operation and control of the energy system under study. A practical demonstration of the underlying methodology is shown for a real-world grid reinforcement project in the UK. The methodology provides a realistic mechanism to analyse investor decision-making and investigate feasible tariffs that encourage distributed renewable investment, with sharing of grid access.@en

Recent years have seen a surge of interest in distributed residential batteries for households with renewable generation. Yet, assuring battery assets are profitable for their owners requires a complex optimisation of the battery asset and additional revenue sources, such as novel ways to access wholesale energy markets. In this paper, we propose a framework in which wholesale market bids are placed on forward energy markets by an aggregator of distributed residential batteries that are controlled in real time by a novel Home Energy Management System (HEMS) control algorithm to meet the market commitments, while maximising local self-consumption. The proposed framework consists of three stages. In the first stage, an optimal day-ahead or intra-day scheduling of the aggregated storage assets is computed centrally. For the second stage, a bidding strategy is developed for wholesale energy markets. Finally, in the third stage, a novel HEMS real-time control algorithm based on a smart contract allows coordination of residential batteries to meet the market commitments and maximise self-consumption of local production. Using a case study provided by a large U.K.-based energy demonstrator, we apply the framework to an aggregator with 70 residential batteries. Experimental analysis is done using real per minute data for demand and production. Results indicate that the proposed approach increases the aggregator's revenues by 35% compared to a case without residential flexibility, and increases the self-consumption rate of the households by a factor of two. The robustness of the results to uncertainty, forecast errors and to communication latency is also demonstrated.@en

The trend of decentralization of energy services has given rise to community energy systems. These energy communities aim to maximize the self-consumption of local renewable energy generated and stored in assets that are typically connected to low-voltage (LV) distribution networks. Energy community schemes often involve jointly owned assets such as community-owned solar photo-voltaic panels (PVs), wind turbines and/or shared battery storage. This raises the question of how these assets should be controlled in real-time, and how the energy outputs from these jointly owned assets should be shared fairly among heterogeneous community members. Crucially, such real-time control and fair sharing of energy must also consider the technical constraints of the community, such as the local LV network characteristics, voltage limits and power ratings of electric cables and transformers. In this paper, we design and analyze a heuristic-based battery control algorithm that considers the influence of battery life degradation, and the resultant increase in local renewable energy consumption within local operating constraints of the LV network. We provide a model that first studies the techno-economic benefits of community-owned versus individually-owned energy assets considering the network/grid constraints. Then, using the methodology and principles from cooperative game theory, we propose a redistribution model for benefits in a community based on the marginal contribution of each household. The results from our study demonstrate that the redistribution mechanism is fairer and computationally tractable compared to the existing state-of-the-art methods. Thus, our methodology is more scalable with respect to modeling the economic sharing of joint assets in community energy systems. @en

Peer-to-peer (P2P) energy trading and energy communities have garnered much attention over in recent years due to increasing investments in local energy generation and storage assets. Much research has been performed on the mechanisms and methodologies behind their implementation and realisation. However, the efficiency to be gained from P2P trading, and the structure of local energy markets raise many important challenges. To analyse the efficiency of P2P energy markets, in this work, we consider two different popular approaches to peer-to-peer trading: centralised (through a central market maker/clearing entity) vs. fully decentralised (P2P), and explore the comparative economic benefits of these models. We focus on the metric of Gains from Trade (GT), given optimal P2P trading schedule computed by a schedule optimiser. In both local market models, benefits from trading are realised mainly due to the diversity in consumption behaviour and renewable energy generation between prosumers in an energy community. Both market models will lead to the most promising P2P contracts (the ones with the highest Gains from Trade) to be established first. Yet, we find diversity decreases quickly as more peer-to-peer energy contracts are established and more prosumers join the market, leading to significantly diminishing returns. In this work, we aim to quantify this effect using real-world data from two large-scale smart energy trials in the UK, i.e. the Low Carbon London project and the Thames Valley Vision project. Our experimental study shows that, for both market models, only a small number of P2P contracts i.e. less than 10% of the possible P2P contracts are required to achieve the majority of the maximal potential Gains from Trade. Similarly, only a fraction of prosumers are required to participate in energy trading to realise significant GT; namely we found that 60% of the maximal GT can be realised with only 30% of prosumers’ participation, with the percentage of maximal GT reaching 80% when participation increases to 50% of prosumers. Finally, we study the effect that diversity in consumption profiles has on overall trading potential and dynamics in an energy community. We show that in a community with a DF(load diversity factor) = 1, 80% of potential maximal GT can be achieved by 10% of prosumers engaging in P2P trading, while in a community with DF = 1.5, it is beneficial for 40% of the prosumers to trade.@en

Renewable energy has achieved high penetration rates in many areas, leading to curtailment, especially if existing network infrastructure is insufficient and energy generated cannot be exported. In this context, Distribution Network Operators (DNOs) face a significant knowledge gap about how to implement curtailment rules that achieve desired operational objectives, but at the same time minimise disruption and economic losses for renewable generators. In this work, we study the properties of several curtailment rules widely used in UK renewable energy projects, and their effect on the viability of renewable generation investment. Moreover, we propose a new curtailment rule which guarantees fair allocation of curtailment amongst all generators with minimal disruption. Another key knowledge gap faced by DNOs is how to incentivise private network upgrades, especially in settings where several generators can use the same line against the payment of a transmission fee. In this work, we provide a solution to this problem by using tools from algorithmic game theory. Specifically, this setting can be modelled as a Stackelberg game between the private transmission line investor and local renewable generators, who are required to pay a transmission fee to access the line. We provide a method for computing the equilibrium of this game, using a model that captures the stochastic nature of renewable energy generation and demand. Finally, we use the practical setting of a grid reinforcement project from the UK and a large dataset of wind speed measurements and demand to validate our model. We show that charging a transmission fee as a proportion of the feed-in tariff price between 15% and 75% would allow both investors to implement their projects and achieve desirable distribution of the profit. Overall, our results show how using game-theoretic tools can help network operators to bridge the knowledge gap about setting the optimal curtailment rule and determining transmission charges for private network infrastructure.@en

Across the globe, electricity sectors have seen a relatively large increase in the number of installations of small renewable energy systems, leading to an interest in the potential role of the prosumer. These prosumers (producers and consumers of electricity) could help drive electricity sector transformation, but at present electricity trading is associated with a lack of control and power held by consumers. Peer-to-peer trading schemes between energy consumers are increasingly being reported in the trade press as a new way to empower consumers, especially since the advent of blockchain, an emergent technology that could facilitate the adoption of such schemes. Research to understand how and why electricity trading occurs has received little attention within literature thus far. In this study we investigated the existing elements of electricity trading. A total of 16 structured interviews with domestic consumers, business consumers, domestic prosumers and business prosumers were undertaken. All interviews identified ease of payment as a key theme for electricity trading (although we note that ease may be in tension with sustainability and greater awareness of energy-related environmental impacts). Consumer interviews also identified lack of engagement with the process of receiving energy, and cost, as key themes. Prosumer interviews identified positive associations with power, and personal and business image, as key themes. Therefore, it is recommended that these factors be incorporated into the user interface of blockchain systems, to potentially increase adoption for peer-to-peer trading.@en

Across the globe, electricity sectors have seen a relatively large increase in the number of installations of small renewable energy systems, leading to an interest in the potential role of the prosumer. These prosumers (producers and consumers of electricity) could help drive electricity sector transformation, but at present electricity trading is associated with a lack of control and power held by consumers. Peer-to-peer trading schemes between energy consumers are increasingly being reported in the trade press as a new way to empower consumers, especially since the advent of blockchain, an emergent technology that could facilitate the adoption of such schemes. Research to understand how and why electricity trading occurs has received little attention within literature thus far. In this study we investigated the existing elements of electricity trading. A total of 16 structured interviews with domestic consumers, business consumers, domestic prosumers and business prosumers were undertaken. All interviews identified ease of payment as a key theme for electricity trading (although we note that ease may be in tension with sustainability and greater awareness of energy-related environmental impacts). Consumer interviews also identified lack of engagement with the process of receiving energy, and cost, as key themes. Prosumer interviews identified positive associations with power, and personal and business image, as key themes. Therefore, it is recommended that these factors be incorporated into the user interface of blockchain systems, to potentially increase adoption for peer-to-peer trading.@en

Favourable sites for renewable generation are often remote locations (such as islands) where installed capacity, e.g. from wind turbines, exceeds local aggregate demand. We study the effect that curtailment mechanisms - applied when there is excess generation - have on the incentives to build additional capacity and the profitability of the generators. Next, for a two-location setting, we study the combined effect that curtailment schemes and line access rules have on the decision to invest in transmission expansion. In particular, for "common access" rules, this leads to a Stackelberg game between transmission and local generation capacity investors, and we characterise the equilibrium of this game. Finally, we apply and exemplify our model to a concrete problem of a grid reinforcement project, between Hunterston and the Kintyre peninsula, in western Scotland, and we determine a mechanism for setting transmission charges that assures both the profitability of the line and local renewable investors.@en

Commercial Virtual Power Plants (CVPPs) have recently emerged as one of the most promising solutions for enabling intermittent renewable energy generation sources to efficiently trade the energy they generate in the electricity market. In this study, we develop several optimization and forecasting methods, and apply them to model the operation of multiple renewable generators across Scotland, trading energy as a single CVPP. The aim of the techniques developed is to optimize the scheduling of the CVPP, such as to maximize revenues and reduce the penalties resulting from forecasting errors, while considering operational and market constraints, such as variable costs, ramping rates, start-up costs, day-ahead and imbalance prices. The practical application is based on a case study of operational renewable energy plants in Scotland, and optimizes the CVPP operation for 3 months in winter and summer of 2017, respectively. Renewable generation output, day-ahead prices and imbalance prices are obtained from historical data for the same year. The numerical results show a profit increase of around 12% for the CVPP compared to standalone operation of renewable plants. This increase is observed for different market and imbalance settlement strategies.@en

Commercial Virtual Power Plants (CVPPs) have recently emerged as one of the most promising solutions for enabling intermittent renewable energy generation sources to efficiently trade the energy they generate in the electricity market. In this study, we develop several optimization and forecasting methods, and apply them to model the operation of multiple renewable generators across Scotland, trading energy as a single CVPP. The aim of the techniques developed is to optimize the scheduling of the CVPP, such as to maximize revenues and reduce the penalties resulting from forecasting errors, while considering operational and market constraints, such as variable costs, ramping rates, start-up costs, day-ahead and imbalance prices. The practical application is based on a case study of operational renewable energy plants in Scotland, and optimizes the CVPP operation for 3 months in winter and summer of 2017, respectively. Renewable generation output, day-ahead prices and imbalance prices are obtained from historical data for the same year. The numerical results show a profit increase of around 12% for the CVPP compared to standalone operation of renewable plants. This increase is observed for different market and imbalance settlement strategies.@en

Commercial Virtual Power Plants (CVPPs) have recently emerged as one of the most promising solutions for enabling intermittent renewable energy generation sources to efficiently trade the energy they generate in the electricity market. In this study, we develop several optimization and forecasting methods, and apply them to model the operation of multiple renewable generators across Scotland, trading energy as a single CVPP. The aim of the techniques developed is to optimize the scheduling of the CVPP, such as to maximize revenues and reduce the penalties resulting from forecasting errors, while considering operational and market constraints, such as variable costs, ramping rates, start-up costs, day-ahead and imbalance prices. The practical application is based on a case study of operational renewable energy plants in Scotland, and optimizes the CVPP operation for 3 months in winter and summer of 2017, respectively. Renewable generation output, day-ahead prices and imbalance prices are obtained from historical data for the same year. The numerical results show a profit increase of around 12% for the CVPP compared to standalone operation of renewable plants. This increase is observed for different market and imbalance settlement strategies.@en

Commercial Virtual Power Plants (CVPPs) have recently emerged as one of the most promising solutions for enabling intermittent renewable energy generation sources to efficiently trade the energy they generate in the electricity market. In this study, we develop several optimization and forecasting methods, and apply them to model the operation of multiple renewable generators across Scotland, trading energy as a single CVPP. The aim of the techniques developed is to optimize the scheduling of the CVPP, such as to maximize revenues and reduce the penalties resulting from forecasting errors, while considering operational and market constraints, such as variable costs, ramping rates, start-up costs, day-ahead and imbalance prices. The practical application is based on a case study of operational renewable energy plants in Scotland, and optimizes the CVPP operation for 3 months in winter and summer of 2017, respectively. Renewable generation output, day-ahead prices and imbalance prices are obtained from historical data for the same year. The numerical results show a profit increase of around 12% for the CVPP compared to standalone operation of renewable plants. This increase is observed for different market and imbalance settlement strategies.@en