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Distributed Autonomous Energy Organizations 235

In addition to potential cost savings, transaction data might be made
more secure by using decentralized storage and multifactor verification of
transactions in the blockchain distributed ledger (PWC, 2017). Blockchain
reduces the need for third parties to process transactions: electricity is gen-
erated ➔ the consumer buys the electricity ➔ blockchain-based meters
update the blockchain, creating a unique timestamped block for verification
in a distributed ledger. At the distribution level, system operators can lever-
age the blockchain to receive energy transaction data to charge their net-
work costs to consumers. This leverage reduces data requirements and
increases the speed of clearing transactions for transmission system operators
because transactions can be executed and settled on the basis of actual con-
sumption (Mylrea & Gourisetti, 2017).
Smart contracts execute and record transactions in the blockchain load
ledger through blockchain-enabled advanced metering infrastructure.
Blockchain-based smart contracts can facilitate consumer-level exchange
of excess generation from distributed energy resources. This could provide
additional storage and help substation load balancing from bulk energy sys-
tems. Moreover, smart contract data are secured in part through the decen-
tralized storage of all transactions of energy flows and business activities. This
blockchain security application highlights the disruption potential block-
chain may have on energy markets because of the introduction of a more
autonomous and decentralized transaction model. This peer-to-peer system
may reduce or even replace the need for a meter operator if the meter block-
chain is shared with the distribution system operator.
Currently, the power grid lacks the necessary security and resilience to
prevent cyber-attacks on DERs, grid-edge devices, and their associated elec-
tricity infrastructure. Cyber vulnerabilities and interoperability challenges
also extend behind the meter into building automation and control systems.
Applying blockchain could help to increase the fidelity and security of build-
ings relative to grid communications. Moreover, multiple customers can
leverage the same widely witnessed blockchain to cryptographically verify
the other entities’ data when needed, creating a distributed trust mechanism.
Blockchain may also help to solve several optimization and reliability chal-
lenges that have been ushered in with grid modernization.
Currently, time lags for payment and from uncollected bills leaves value
on the table, failing to capture the real cost associated with the energy value
chain. Blockchain can record real-time net loads, and smart contracts can
execute customers distributed–generation sales and purchases. Grid opera-
tors also lack visibility into and control of real-time power flows and