Transactive Energy Systems in Decentralized Autonomous Renewable Energy Communities

According to international guidelines and regulatory frameworks in the near future, renewable energy communities (RECs) will play a crucial role in the transition to a cleaner energy system and decarbonization of the electricity sector. In this context, in order to ensure an increasing participation of consumers, producers, and prosumers, it is necessary to develop new decentralized autonomous organization (DAO) models for the implementation and management of these communities, taking into account the economic and control mechanisms that allow electricity to be exchanged in electricity grids using the value of energy as a key operational parameter according to the transactive energy (TE) paradigm. Within these new energy exchange models, a key role will be played by the distributed ledger technologies (DLTs), such as blockchain, that have been identified as a promising solution and enabler for the concrete implementation of TE systems. DLT can enable secure and transparent transactions between energy participants in these systems and can automate transactions leveraging smart contracts and enabling peer-to-peer transactions without the need for intermediaries. Consequently, DLT can provide the foundation for the creation of TE system business models. The DAO model, based on distributed ledgers, brings transparency, verifiability, mutual trust, and a community-driven decision process, enabling new governance models in which rules are encoded in smart contracts. RECs can be implemented according to the TE paradigm and enabled by DLTs to realize distributed autonomous renewable communities (DARCs). REC's implementation is facing major critical issues that are caused by a lack of mutual trust among participants, which usually also deals with challenges caused by disharmony within the community itself. DAOs come to the aid of RECs as a tool for easier management of the social network, the technological assets, and the organization of internal processes, shifting the decision-making power from a centralized authority to the members of the community. Furthermore, DAOs can promote inclusive and active participation offering a solution to leadership problems catalyzing the large-scale diffusion of RECs and paving the way toward a holistic approach for the collective management of a TE system. The objective of this chapter is to provide an overview of how distributed autonomous organization systems can be leveraged by energy communities giving details of the system characteristics and the necessary electrical, electronic, and information technology infrastructures required to implement. The digital assets required to operate a REC according to the DAO paradigm and provide a glimpse on how local markets can benefit from decentralized markets are introduced. Finally, a model for a local energy market (LEM) illustrating how the energy community management can be operated from a technical and economic perspective is illustrated.