Is the Blockchain a good solution for Cybersecurity in the Smart Grid?

By Juan C. Olivares-Rojas, Enrique Reyes-Archundia, José A. Gutierrez-Gnecchi, Ismael Molina-Moreno, and Adriana Téllez-Anguiano

Nowadays the blockchain is one of the most important topics in research. This is because its applications are varied and in all fields. One of these fields is for the Smart Grid. Although blockchain itself is a cybersecurity mechanism, many of its applications have been carried out in the area of decentralization and trading energy. This work focuses on showing all the advantages and disadvantages of using blockchain as a cybersecurity mechanism in all the parts that make up the smart grid. Finally, it is concluded if the blockchain is the appropriate tool to guarantee information security in the smart grid.

We currently live in the Fourth Industrial Revolution (Industry 4.0) characterized by the abundant use of Information and Communication Technologies (ICT). It is mainly a data revolution. For many authors, the data is today's new oil.

All human activities have benefited from the arrival of the 4th Industrial Revolution, particularly the electrical grid. The infrastructure of the grid went more than 100 years without major changes. Mainly there have been innovations in the electricity and ICT sector. In particular, these changes have been seen in new technologies such as distributed energy resources, sensors, intelligent electronic devices, artificial intelligence, and Blockchain among others.

In addition to technological innovations, the electrical grid has benefited from economic and regula-tory changes among which the concept of prosumers stands out. Now clients are no longer simple con-sumers of energy, but can also be to be producers of energy through the use of renewable energy such as solar and wind. Additionally, Transactive Energy Systems create more flexible systems of energy commercialization among prosumers.

One of the most used applications in Smart Grid are the Smart Metering Systems, which allow real-time reading of measurements without the need for meter readers and are less prone to human errors. This, in turn, means that, among other functions, power cuts and reconnections can be conducted re-motely, as well as real time monitoring of energy consumption and its cost.

On the other hand, this use of ICTs in Smart Grid also makes them more vulnerable to cybersecuri-ty incidents, for example, the information reported to billing systems can be altered through tampering to artificially lower consumer consumption and therefore economic losses could be imposed on utilities. According to the world bank, energy theft contributes to the loss of energy delivery by 25% in India, 16% in Brazil, 6% in China and the United States, as well as 5% in Australia.

In México, within the Smart Grid Program (PREI) 2017-2031 of SENER (Secretary of Energy) and in which the Federal Electricity Commission (CFE), the National Center for Energy Control (CEN-ACE) and the Energy Regulatory Commission (CRE) participate, it is estimated that the level of non-technical losses (energy theft, incorrect captures, falsification of readings, incorrect measurement of the meter) represents 13.38%. Hence, achieving a safer mechanism of smart metering is a necessity. In addi-tion, the PREI stipulates other premises among which the cybersecurity of all the systems stands out. In this sense, smart meters are considered as the first point of attack, so having security mechanisms is a necessity, given that the Smart Grid is a critical infrastructure of national security.

For these reasons, it is necessary a cybersecurity mechanism is set in place to guarantee protection for transactions carried out in Smart Metering Systems. One of the cybersecurity protections is Block-chain. Blockchain is a mechanism that will store information in a distributed, replicated manner and with high security mechanisms that make the integrity of the data difficult to manipulate.

The Blockchain can be seen as the integration of various cybersecurity techniques that have evolved for more than 40 years, including:

  • Asymmetric encryption used for signing transactions,
  • Robust data structures such as merkle trees,
  • Peer-to-Peer (P2P) communication systems used in the sharing of transactions and blocks,
  • Hash functions used to encrypt / obfuscate information securely,
  • "Key-value" databases used to search in previous transactions, and
  • Consensus methods to validate/confirm transactions such as "proof of work".

According to the Smart Grid Council, 90% of Blockchain implementations in Smart Grid are in the Customers/Distribution area. On the other hand, 90% of these proposals are in the fields of P2P Energy Marketing and Energy Transaction Systems. The remaining 10% is divided into other areas of distribu-tion and consumption: Renewable Energy Certification, Management of Electric Vehicles, Energy Effi-ciency, Appliances, Energy Payment Systems and finally: Measurement-Billing.

Under this last point it is important to mention that no technology is 100% safe, so that a mecha-nism such as the blockchain presents some drawbacks, which compared with other security schemes are more robust.

Some of the disadvantages and opportunities of Blockchain are:

1. They are fragmented technologies. Although it is true that Blockchain is made up of different technologies, these are found in the vast majority of functional and interoperable cases.

2. There is no single consensus algorithm. This more than a disadvantage presents several alternatives to tackle a particular problem.

3. Performance issues: issues such as scalability, security and performance today have been proven successful. While it is true that one of the main concerns lies in the size of the blockchain, there are seri-ous studies that this growth follows the curve of the Moore’s Law. Thus, even if the storage space grows, the storage hardware capabilities grow in the same proportion to store it.

4. It is not clear or easy to choose between a public and/or private blockchains.

5. Another of the main problems of the blockchain has to do with the computational power (the re-sponse times of the applications and the high energy consumption). Regarding the high consumption of processing and/or storage, this really only happens in consensus algorithms such as the work test, there are other algorithms that are not so consuming of computing capacity.

For all these reasons, the use of blockchain as a security mechanism in the Smart Grid will be ex-tended in the coming years guaranteeing trust in all processes among users and utilities.

This article was edited by Frances Bell.

For a downloadable copy of the July 2018 eNewsletterwhich includes this article, please visit the IEEE Smart Grid Resource Center



juan olivares rojas

Juan C. Olivares-Rojas, IEEE senior member, is with the Technological Institute of Morelia. He is a full time professor in the Department of Systems and Computing. He is studying for a PhD in Engineering Sci-ences at Morelia Technological Institute. His research interests include cyber security in the smart grid, distributed systems and databases.


enrique reyes archundia

Enrique Reyes-Archundia, IEEE senior member, is with the Technological Institute of Morelia, and a full time professor in the  electronics graduated program. His research interests include control systems for smart grid and signal processing


jose gutierrez gnecchi

José A. Gutierrez-Gnecchi, IEEE member, is with the Technological Institute of Morelia, and a full time professor in the electronics graduated program. His research interests include smart metering systems in diverse fields such as biomedical, agricultural and industrial.


ismael molina moreno

Ismael Molina-Moreno, IEEE member, is with the Technological Institute of Morelia. He’s a full Ttme professor in the electronics graduated program. His research interests include signal processing and electrical cir-cuit optimization


adriana tellez anguiano

Adriana Téllez-Anguiano, IEEE senior member, with the Technological Institute of Morelia. She’s a full time professor in electronics graduated program. Her research interests include signal processing and renewables energies.

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