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Authors: Iacopo Savelli, Hanumantha Rao Bokkisam, Paul Cuffe, Thomas Morstyn

Abstract: The large deployment of (opens in a new window)renewable generation required to reach net-zero (opens in a new window)carbon emission requires significant investments in (opens in a new window)transmission network infrastructure to reduce grid congestion, as well as costly investments in dispatchable assets to manage the intermittency of (opens in a new window)renewable energy. The provision of flexibility services to system operators represents an additional method that could help solve these issues. However, this requires the engagement of a large number of small users, such as households and small commercial firms, that usually cannot directly participate in electricity markets due to their limited size. (opens in a new window)Blockchain technologies leveraging (opens in a new window)smart contracts can provide an autonomous, cost-saving and transparent tool to help engage these users in the provision of flexibility services to the grid. The aim of this paper is to design a new market layer for the on-demand provision of flexibility services by using smart contracts fully integrated with existing national-scale electricity markets. We demonstrate how this model can co-exist with the current electricity market architecture in Great Britain (GB), providing a whole-system least-cost solution to solve grid congestion and energy imbalances. Simulations based on a high-fidelity network of GB highlight the (opens in a new window)potential benefit that the proposed approach could create at the national scale.