FlexSecure: Enhancing Flexibility Delivery Settlement with ZKPs

The role of flexibility services in facilitating decarbonization opportunities within the energy system is crucial as the need for decarbonization intensifies. However, concerns arise when it comes to sharing sensitive data related to energy consumption and production. This is where zero-knowledge proofs (ZKPs) come into play, offering a solution to ensure the security and privacy of data sharing. By implementing ZKPs in the flexibility market, the transition to a more sustainable and decentralized energy system can be accelerated, while also safeguarding the security and privacy of flexibility providers.

The problem statement revolves around the ambitious goal of achieving net-zero emissions and the resulting seismic shift towards digitalization and decentralization in the energy sector. With the increasing presence of distributed generation and the emergence of a bilateral energy flow model, both challenges and opportunities arise within future energy networks. While distributed generation holds great potential, exploring and harnessing its benefits require intentional and collaborative efforts.

A smart and flexible energy system, facilitated by a larger volume of data, presents a promising solution to address energy challenges. In the context of electricity distribution networks, flexibility refers to the ability of an energy asset to adjust its generation or demand in response to external signals. As network operators increasingly rely on small-scale prosumers or large-scale aggregators for flexibility services, concerns have emerged regarding the data transfer and settlement process.

Currently, network operators mandate flexibility prosumers to develop an application programming interface (API) linking their energy asset’s metering device(s) to extract data before the delivery of flexibility. The required data includes the energy asset’s load or generation capacity profile, expressed in Watts over a specific period. The network operator then calculates a baseline energy profile and compares it with the current profile during delivery to determine the amount of flexibility provided.

However, the existing flexibility delivery settlement process raises security and privacy concerns for both flexibility providers and network operators. From the perspective of flexibility providers, the requirement to construct an API from their energy asset’s metering device(s) in order to extract data for baseline energy profile calculation introduces potential vulnerabilities. By sharing the whole energy profile for baselining, flexibility providers may unintentionally expose sensitive information, such as energy consumption patterns and asset capabilities, making their systems susceptible to unauthorized access.

Additionally, the verification of flexibility delivery typically involves comparing the baseline energy profile with the current energy profile during delivery, potentially revealing sensitive data and energy profiles of flexibility providers. This is particularly concerning for small-scale prosumers who may have limited resources to invest in robust data management systems ensuring security.

On the other side, network operators also face security and privacy risks in the collection and processing of flexibility data. Handling large volumes of data increases the risk of cyberattacks and unauthorized access to sensitive information, including energy consumption patterns and customer data. Robust security measures are necessary to protect the data and maintain privacy.

Ideally, flexibility providers should only be required to share the delivered flexibility amount, measured in kWh of either generation or consumption, without divulging their energy asset’s energy profile. This approach would ensure critical data is communicated to the network operator while safeguarding sensitive asset information.

To address the security and privacy concerns associated with the current flexibility settlement process, the implementation of zero-knowledge proofs (ZKPs) and MINA blockchain technology offers an elegant solution. ZKPs allow the proof of a statement’s validity without revealing any information about the statement itself. In the context of flexibility settlement, ZKPs can be employed to prove that the flexibility provider has delivered the required energy amount while keeping their energy profile confidential. This eliminates the need for flexibility providers to disclose their energy profile to the network operator, thereby preserving data privacy and security.

The proposed solution involves utilizing the MINA blockchain as the underlying platform. The MINA blockchain employs recursive SNARKs, enabling efficient transaction verification without the need

for a full node. This advantage enhances scalability and efficiency since participants can verify transactions without storing the entire blockchain.

By leveraging the MINA blockchain, flexibility providers can create a proof demonstrating the delivery of the required energy amount without exposing their energy profile. This proof can be submitted to the network operator, who can verify its validity using the MINA blockchain. The network operator does not require knowledge of the provider’s energy profile to validate the proof, ensuring data privacy and security.

To prevent the identification of the flexibility provider beforehand and potential interference with delivery, asset mapping will be conducted on-chain but remain undisclosed. Communication between the distribution network operator (DNO) and the winning bidder will occur off-chain. In the flexibility contract’s smart contract, an immutable hash of the winning bidder’s private key will be established. After signaling job completion, the prosumer can withdraw the flexibility. On-chain data will not reveal the identity of the prosumer to external observers.

Considering the time response requirements in the flexibility market, proofs will be generated every 15 minutes. Since the energy sector typically aims for a data granularity of 15 minutes, no tighter granularity requirements are foreseen in the future.

The utilization of ZKPs and the MINA blockchain offers several advantages over the current flexibility settlement process. Firstly, it enhances the security and privacy of flexibility providers, ensuring the confidentiality of their energy profiles. Secondly, it simplifies the settlement process for both flexibility providers and network operators, reducing administrative burdens and transaction costs. Lastly, it supports the growth and expansion of the flexibility market while upholding the security and privacy of participants, thus accelerating the transition towards a more sustainable and decentralized energy system.

To successfully implement this solution, several steps must be taken. First, the MINA blockchain infrastructure needs to be developed and deployed, including the creation of smart contracts facilitating the creation and verification of ZKP proofs. Second, flexibility providers and network operators must receive education and training on how to utilize the new system. User-friendly interfaces should be developed to simplify the creation and verification of ZKP proofs. Finally, the system should undergo rigorous testing and validation to ensure security, efficiency, and scalability.

In conclusion, the application of ZKPs and the MINA blockchain offers an elegant solution to address security and privacy concerns in the current flexibility settlement process, eliminating the need for flexibility providers to build APIs for settlement purposes. By allowing flexibility providers to prove the delivery of flexibility without disclosing their energy profile, this solution safeguards the security and privacy of providers while simplifying the settlement process for both parties. Moreover, it facilitates the growth and expansion of the flexibility market, preserving the security and privacy of its participants, and expediting the transition to a more sustainable and decentralized energy system. This project was funded by the Mina Foundation’s, zkIgnite program cohort 1.

Team members Nicolas Manea: Discord ID nicolasmanea#3385 Wincenty Dulkowski: Discord ID wdulkowski#9710

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