Privacy-Preserving Netting in Local Energy Grids

Abstract

The production of renewable energies by individual households typically is small-scale and not profitable without public subsidies, yet a critical factor in preventing further global warming. Unlike market-based peer-to-peer trading solutions, which require households to engage in costly peer-to-peer trading activities, we propose a community-based approach where households in a local distribution grid share the energy they produce in a netting process to maximize internal consumption. The technical instantiation of this idea in real-world energy grids comes with several challenges. Households within a community do not necessarily trust each other or electric utilities. Furthermore, energy consumption data is highly sensitive and must be protected. Further idiosyncrasies of national energy markets, regulatory frameworks, and current grid infrastructure exist. Addressing all these challenges, we propose a blockchain-based system that leverages zero-knowledge off-chain computations to facilitate automated energy sharing within a community in a trustless and privacy-preserving way. We provide a proof- of-concept implementation using the ZoKrates framework for verifiable off-chain computations and the Ethereum Blockchain. To support our claims, we provide evaluation results obtained in the context of a major German national research project on blockchain-based energy networks.