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Building Carbon-free Society with Technology to Facilitate Energy Trading Between Consumers on Blockchain

Demand Response (DR) Enables Electric Utilities to Adjust Energy Use Based on Demand

The global movement of building carbon-free society is accelerating as global environmental issues become increasingly serious. Building carbon-free society refers to efforts to reduce the use of fossil fuels, such as oil and coal, which are considered as major cause of global warming.

Currently, these efforts are powering the shift from oil and coal to forms of renewable energy such as solar power, hydrogen fuel, and biomass fuel. As expectations for renewable energy increase as we move toward carbon-free society, there is increasing demand for better energy management—in other words, efficient use of electric power generated using renewable energy.

One effort that is attracting attention is demand response (DR), which adjusts electric power usage through cooperation between electricity providers, such as electric power companies, and consumers, such as factories, shopping malls, and office buildings.

As DR becomes more widespread, it can reduce or leveling out the amount of electricity usage, if electric utilities company pays rewards to consumers who contributed to the power saving when the electric power supply is expected to be short.

However, DR faces some potential challenges. One such challenge is that when an electric power company makes an adjustment request to a consumer, said consumer may not be able to meet the requirements for adjusting power consumption as planned. To solve problems like this, Fujitsu Laboratories uses blockchain technology.

Conventional DR Does Not Enable Companies to Accommodate the Electricity They Conserve to Others

Blockchain is commonly known as the foundational technology for cryptocurrency, among which Bitcoin is the most well-known. How can we use this technology to solve the problem about DR?

With DR, when an electric power company issues an saving request, that request is received by an intermediary company called an aggregator. Then, the aggregator will dispatch power savings amount to the entities under its DR control, such as factories and shopping malls, and then sends out power savings requests. During the requested period, if a consumer achieves the requested power savings amount, the electric power company first pays the aggregator the equivalent value, which in turn pays each consumer depending on the requested power savings amount.

Conventional DR requires aggregators to communicate with consumers one-on-one basis in order to dispatch the power savings amounts and to confirm their success. Because of this, even if a company cannot meet the power consumption goal, there is no system to accommodate trading of conserved electric power among companies, such as enabling companies that save more electricity than planned to lend the remaining amount of saved electricity. In other words, Conventional DR does not have a scheme to cooperate with other consumers on saving power usage as the system.

To solve this, Fujitsu Laboratories used its blockchain technology to develop an electricity accommodation trade technology that facilitates mutual lending of excess electric power among consumers that have a contract with the aggregator.

Figure 1: Conventional DR does not allow company A and B to lend electricity to each other.

Maintaining Transparency in Electricity Accommodation Trade Using Blockchain Technology

With DR, when an adjustment request for electricity is made, there are cases in which consumers must quickly respond to the aggregator regarding their ability to conserve electricity. To enable this, Fujitsu developed a two-step accommodation trade technology for electricity. This technology first requests the total sum of lendable electricity from the selling demand registered in the trading system, and then quickly confirms purchasing demand in order to speedily respond with the exact amounts that can be purchased. After responding, selling demand is distributed without waste to meet the confirmed purchasing demand.

By applying this accommodation trade technology for electricity, Fujitsu built an electricity accommodation trade system on the blockchain, which enables fast procurement in response to electricity shortages and efficient distribution of power to meet selling and purchasing demand. Use of blockchain technology ensures the transparency of recorded accommodation trade details, thus achieving a fair distribution of compensation based on trades that cannot be falsified.

Figure 2: The purchase amount is confirmed by summing the amount of electric power, and then sales and purchases are efficiently distributed.

Fujitsu Encourages Use of Renewable Energy with Blockchain Technology

With developed trading technology, even if it is difficult to meet a request for power savings, companies can quickly purchase and compensate the excess electric power of other consumers as needed to match their power savings goals, thus enabling them to consistently meet aggregators' power saving requests.

Fujitsu and Fujitsu Laboratories simulate the behavior of electricity lending among consumers on the developed trading system using the actual power consumption logs of 20 consumers for the summer and winter terms of 2018. The results indicated that compared to the conventional method, the DR success rate improved about 40%.

DR may become the foundation of energy management in the future. Through this electricity accommodation trade technology that utilizes the blockchain's characteristics, compensation can be secured when DR requests are met, which supports the spread of DR, thereby encouraging efforts toward a decarbonized society.

Fujitsu has signed on to RE100, which aims to make all electric power used by companies 100% renewable. We have reduced our carbon emissions and are working to achieve a carbon-free society. As part of these efforts, we are conducting verifications of this technology in production environments with the aim of future implementation.