APPLYING DISTRIBUTION LEDGER TECHNOLOGY TO MICROGRIDS - A STEP TOWARD THE RENEWABLE ENERGY TRANSITION

Abstract

This work focuses on applying distributed ledger technology (DLT) to microgrids and their diffusion in society. The thesis’ purpose is twofold: first, trying to identify the reasons for the slow adoption of microgrid, and second, how DLT can facilitate their adoption. The thesis describes the essential components of microgrids and DLT, their implementation in previous projects, and the Diffusion of Innovations model. The work includes empirical findings that emerged from interviews with academics, companies’ representatives and households who have had direct experience with either microgrids or DLT or (ideally) both. The last part tries to connect the concepts found in the literature and interviews. Key findings are that in the case of DLT-based microgrids, the classical top-down, centralized diffusion system, where companies “push” an innovation is likely to be ineffective. Microgrid projects should be community-driven, meaning groups of people take the initiative to organize local energy communities where owners of distributed energy resources (DERs), also known as prosumers, exchange the surplus of energy directly with other members of the microgrid. The initial challenge is that to have adoption, groups of people need to be aware of the innovation, and (at least) some participants need to have a basic knowledge of the system to become prosumers. Municipalities could be crucial facilitators of communication and adoption. Regarding DLT, the research found that previous projects which implemented blockchains based on proof-of-work (PoW) had unsatisfactory results. In particular, the market mechanism implemented was inefficient in terms of costs and time compared to standard solutions. More recent DLTs address blockchain limitations however their application on microgrids is not well-established yet. Therefore, there is a substantial need for further development in this field.