8th IEEE International Conference on Smart Grid
A Blockchain-based Smart Grid Model for
Rural Electrification in India
1st Vedika Kulkarni
Dept of Computer Science and Engg.
Indian Institute of Technology
Guwahati, India
kvedika25@gmail.com
Abstract—There are rural areas across India and many other
countries who receive unreliable and inadequate electricity sup-
ply, or no electricity at all. Electricity is essential for the overall
development of an individual, and the society in turn benefits
from it. Lack of access to grid electricity forces the rural
inhabitants to utilize conventional sources of energy, causing not
just inconvenience but also deterioration of the environment. In
this paper, the reasons preventing reliable power supply to rural
places in India have been discussed. Applicability of Blockchain
technology to address these challenges and promote rural elec-
trification is being researched. This paper focuses specifically on
problems faced by rural communities due to which they avoid
electricity connections, and how these problems can be solved by
Blockchain technology. Blockchain has the potential to eliminate
expensive third-party service costs, generate additional revenue
through peer-to-peer trade, planning the power consumption as
per budget through smart metering and maintain transparency
and accuracy of energy transactions. However, the road to
implementation consists of many challenges to overcome which
have been discussed in this paper.
Index Terms—Rural Electrification, Smart Grids, Blockchain
I. I NTRODUCTION
One of the targets of United Nations Sustainable Develop-
ment Goals is to ensure universal access to affordable, reliable
and modern energy services by 2030 [1]. Around 940 million
people [2] around the globe do not have access to electricity.
Reference [3] explains that electricity access is consistent with
current definitions of human rights. Governments across the
world, particularly in developing countries are taking efforts
to ensure that each citizen of their country has access to
electricity. However, only having access through physical grid
connections is not sufficient. Electricity supply should be
reliable and adequate, only then it is useful. The goal of 100%
electrification is accompanied by the target of increasing the
renewable energy contribution in the total power generated
globally. The role of Distributed Renewable Energy systems
(DREs) is gaining significance with the rise of Internet-of-
Things (IoT) technology. DRE systems have the potential
to ensure non-polluting and reliable power supply to rural
households and enterprises.
In this paper, we analyse the various reasons, from a rural
Indian electricity consumer’s point of view, due to which
they seem hesitant towards grid connections. We propose a
blockchain-based smart grid model which can potentially solve
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2nd Kalyani Kulkarni
Dept of Electronics and Telecomm. Engg.
PVG’s College of Engineering and Technology
Pune, India
kjk entc@pvgcoet.ac.in
many problems faced by the rural population. As compared
with previous works, our research is unique in the sense that
we have focused on the Indian rural electrification scenario
from the consumers’ perspective and how blockchain technol-
ogy can solve the specific issues. It must be noted that though
there are few similarities, yet there are many differences
between the scenarios in various developing countries and
hence it is important to analyse each country separately as
per their resources, current electricity scenario and capacity
of the Government.
This paper proceeds as follows. Section 2 consists of
analysis of existing rural electrification situation in India
and the challenges related to it as well as to the adoption
of renewable sources of energy. Section 3 briefly explains
Blockchain Technology, followed by Section 4 describing
our proposed Blockchain-based smart grid model. Section 5
describes each feature of the model in detail. Section 6 points
out the adoption challenges of the model, followed by the
conclusion.
II. A NALYSIS OF PRESENT SITUATION
According to the draft of the National Energy Policy (NEP)
[4], in 2017 almost 304 million citizens of India did not
have access to electricity, majority being from rural regions.
In 2018, almost 65% of Indian population was residing in
rural areas [5]. Progress of these rural areas has a dominant
impact on the development of the nation as a whole. 100%
electrification will lead to tremendous socio-economic benefits
such as enhanced education standards, increase in productivity,
increase in job opportunities as well as improved healthcare
facilities. Apart from these, there are many environmental
advantages too. People not having access to electricity are
forced to resort to non-renewable resources such as kerosene to
fulfil the energy demands for their daily chores. This not only
leads to depletion of conservative resources but also causes
emission of gases harmful to our ecosystem.
A. Analysis of present situation in India
Numerous schemes have been proposed at national and
state levels with a target of making power available to the
entire population. Fig 1 shows few of the recent schemes
implemented in India.
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production, AT&C losses, prioritizing industrial regions for

Figure 1. Notable Government Schemes launched for Rural Electrification in
India over the past five years
electricity supply are few reasons that lead to load shedding
in the rural areas. Reference [6] observes that even though
electricity is supplied at heavily subsidised rates in India, some
parts of the country face affordability issues. This is mainly
due to un-metered connections. Every household is charged
with a fixed tariff. Due to this, poorer households have to
pay for more electricity than what is actually used by them.
Another reason is the irregularity in billing, due to which
households cannot plan their expenses and are encountered
with large bills at irregular intervals.
C. Challenges related to renewable energy adoption
There is worldwide awakening about reducing the usage
of conventional resources. Efforts are being made globally to
embrace renewable energy sources. India, being close to the
equator has tremendous solar energy potential. The contribu-
tion from various renewable sources has been increasing in the
country. But the adoption of non-conventional resources has
its challenges as pointed out in Fig 2. The issues related to
the lack of control over generation and decentralized nature of
resources need to be handled through advanced technologies.

The Saubhagya scheme launched in 2017, targeted 100%

household electrification, by providing last mile connectivity
and electricity connections to all households, by March 2019.
The Government declared the accomplishment of this project
during April 2018. However, there are some areas that need
attention. Reference [6] is an extensive study conducted across
the villages of four Indian states. It reveals that a significant
17% homes remain un-electrified across these four states.
The homes, who were unwilling to connect to the grid,
remained un-electrified across the country. Apart from this,
dissatisfaction regarding electricity supply is seen among a
substantial percentage of the population. The reasons for the
reluctance to set up electricity connections have been discussed
in the next section.

B. Existing Challenges
As per [6], following are the major reasons due to which the
rural population is hesitant towards setting up grid-electricity
connections:
• Affordability issues caused by
– Lack of metering
– Inefficiency and irregularity in billing Figure 2. Comparison of Renewable and Conventional Energy Generation
– High connection costs
– Availability of alternatives
III. B LOCKCHAIN T ECHNOLOGY
• Dissatisfaction among customers due to
Blockchain Technology has its origins in the paper “How to
– Uncertain power supply Time-Stamp a Digital Document” published in 1991 by Stuart
– Long duration of power cuts leading to inadequacy Haber and W. Scott Stornetta [7]. Simply put, a Blockchain
• Low demand due to lack of appliances run by electricity is a cryptographically linked chain of blocks, each of which
• Lack of proper documentation, such as proof of residency contains time-stamped records. Any tampering with one block
Efforts have been made at national level to ensure grid- causes all the further blocks in the chain to become invalid.
connectivity to all households. However, connectivity and It is a decentralized system where each user has the access to
access to the grid does not imply availability. Reduced energy all records. The records stored on a Blockchain are immutable

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Figure 3. Proposed Blockchain-based Smart Grid Model
and are verified by multiple parties through various consensus
protocols. Blockchain technology came into limelight after the
release of the whitepaper “Bitcoin: A Peer-to-Peer Electronic
Cash System” by the pseudonymous author Satoshi Nakamoto
in 2008 [8] followed by the release of its implementation
in 2009. Bitcoin gained popularity in no time as increasing
number of people were willing to invest in bitcoin. It was the
first cryptocurrency that allowed reliable financial transactions
without the need of a trusted central authority, such as banks
and financial institutions [9]. Blockchain is the technology un-
derlying the Bitcoin. Blockchain Technology has the potential
to change numerous other industries apart from the Finance
industry. One of the fields that naturally pairs with Blockchain
is Information Technology. Almost every industry today -
Healthcare, Pharmaceuticals, Agriculture, Automotive, Media,
Finance, Manufacturing, Transportation, Government, Trade,
Education has embraced Digitization and is dependent on the
Information Technology industry. Digitization has revolution-
ized the way we transact, communicate and commute making
it faster and more efficient. One of the greatest contributions
of IT is the transformation of the simple electrical grid to
the 21st century’s smart power grid. Being a decentralized
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structure itself, Blockchain has the potential to enhance the
smart grid. Various features of Blockchain technology such as
secure and transparent transactions which are peer-to-peer in
nature, enhanced security through cryptography and trustless
environment are a boon to the development of smart grids.
IV. B LOCKCHAIN - BASED S MART G RID M ODEL
Before proposing our Blockchain-based smart grid model,
it is important to understand the utility of micro-grids in India
and the importance of their integration with main grids.
1) Necessity of micro-grids in India:
India has made significant efforts to ensure grid-connectivity
for each village. However as noted in [6], many rural grid-
connected households in India are not satisfied with the
electricity supply due to inadequacy and uncertainty. Micro-
grids are the solution to unreliable power supply. Renewable
energy harnessed within the micro-grid in combination with
storage systems is capable of providing reliable and sufficient
energy supply. Micro-grids also minimize losses caused during
transmission of power. Another reason for micro-grid adoption
is the geographical features of India. For a country like India
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8th IEEE International Conference on Smart Grid
having diverse terrain, it is difficult to provide reliable macro-
grid supply to all households. This makes adoption of micro-
grids suitable in India.
2) Importance of integration of micro- and macro- grids:
The power system of India is divided into five regional grids
for effective planning and operational efficiency. The regional
grids are further divided according to state utilities. These
five grids are connected to form the national grid, one of the
largest operational synchronous electricity grid globally. India
gives major importance to integration whose benefits have
been stated in [10]. They include suppression of fluctuations
in voltage and frequency, sharing of resources of various
regions as well as security advantages. For the country which
focuses on ‘One Nation, One Grid’, smooth integration of
micro-grids with the main-grid becomes essential. It is also
beneficial for micro-grid users who can generate additional
revenue by supporting the main grid at peak demands. As
suggested in [11], interoperability of grids is an issue and
various methods have been proposed and implemented to
overcome it. Blockchain can play a critical role to develop
an efficient solution to this problem.
Fig 3 represents our proposed model. It consists of micro-
grids formed in rural areas. The expenses to set up micro-grids
can be compensated by the revenue generated as a result of
energy trading over a time period of few years. The micro-
grids will consist of prosumers as well as consumers, all
of whom shall be associated with aggregators. The role of
aggregators has been explained in Section 5.4. Each feature
of the proposed micro-grid system has been discussed in the
following section. Localized micro-grids have vast potential
in India and our proposed model utilises the characteristics of
Blockchain technology to overcome challenges related to rural
electrification.
Figure 4. Primitive Solidity Code to Demonstrate Energy Trading
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V. B LOCKCHAIN APPLICATIONS FOR RURAL
ELECTRIFICATION
A. Decentralized Energy Marketplace
There has been a significant increase in the contribution
of distributed energy resources (DERs) to the electricity grid.
The conventional grid however, is not built in a way that
can handle such dynamic loads. Production needs to be in
alignment with the consumption of energy. For this purpose,
the concept of energy trading has gained value in recent times.
Another incentive for energy trading is revenue generation.
The owners of solar panels and other distributed renewable
energy resources get pay offs in their grid-electricity billing.
The owner has to pay the difference between the net cost
of grid electricity consumed and solar energy supplied to the
grid. This reduces the electricity bill dramatically, however the
owner does not generate any additional income. Blockchain
can enable peer-to-peer energy trade profitable for DRE own-
ers. Such a marketplace is suitable for small and localized
micro-grids, which have vast potential in India.
The establishment of local energy markets require secure
communication and payment mechanisms. As pointed out in
[12], with the rise of distributed energy resources such as
electric vehicles and bidirectional energy trading models, the
existing smart grid infrastructure will undergo a revolution,
changing from a centralized networking model to a decen-
tralized and distributed network. The energy trading has to be
autonomous in nature, transparent, reliable and trustless.These
properties are coherent with the inherent characteristics of
Blockchain. Many systems have been proposed to enhance
energy trading through Blockchain as listed in [12].
Fig 4 shows a primitive, simplified version of how a smart
contract can be used for energy trade. It ensures that the
seller (producer/prosumer) gets the best deals and makes
maximum profit. This will serve as an incentive for more
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people to adopt DREs. Practical smart contracts will be much
more complex and will involve the best possible seller-buyer
matching algorithms. It is to be noted that in such a system
either energy is supplied to neighbours, stored for one-self
or supplied to the grid. In each scenario, the owner can
make additional revenue if his consumption is lower than his
generation. Thus, micro-grids can be very profitable providing
reliable and cheaper electricity supply in rural areas where
consumption is generally less. It will also promote higher
contribution from renewable sources to the total energy gen-
eration. Reference[13] proposes an Incentive-based Demand
Side Management Strategy for standalone Micro-grids. With
the help of Blockchain, such systems can be extended to
combination of micro- and macro- grids.
Thus, citizens of rural areas will be incentivized to set up
micro-grids because of
• Reliable and adequate electricity supply
• Additional revenue generation
B. Billing Efficiency
As the percentage of unmetered connections is high in
few rural areas, electricity is billed at constant monthly tar-
iff. Taking the example of the state of Uttar Pradesh [6],
the unmetered households are charged a fixed amount of
INR 400 per month. This system benefits households having
higher electricity consumption, but is unjust towards poorer
households requiring electricity for basic needs only. Some
households face the problem of the electricity bill amounts
being not in proportion with the consumption. This maybe
due to inaccurate meter reading by the billing agencies, or the
consideration of average consumption to fix a tariff, as stated
above. There is urgent need to establish metered connections
in such areas and make sure that the third parties involved
do not charge them more than the amount of electricity that
has been consumed by them. With the help of Blockchain
technology, transactions can be carried out securely without
the involvement of trusted third parties for monitoring smart
meters and verifying data. Blockchain will make sure that the
customer pays only for the kWh units he has used. Such a
system is an attempt to make electricity affordable for all.
C. Blockchain-enabled smart metering
As noted in [6], irregularity in bill generation is another
factor that prevents rural households and enterprises from in-
vesting in grid connections. Few households receive electricity
bills after two or three months, while few receive it after six
months, and there are cases where they have not received bills
at all. Such irregularity in bills is troublesome for households
and enterprises. It puts unforeseen economic pressure on the
consumer. It is an obstacle to budget planning which is crucial
for all consumers. Thus, ensuring regularity and accuracy in
electricity bills is essential for acceptance of grid-connections
by users. The combination of smart metering with Blockchain
technology is the key to authenticity, correctness, regularity
and transparency in the billing process. The Blockchain-
enabled smart meters have the capability of taking the correct
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decisions regarding purchase and sale of power by the virtue
of inbuilt smart contracts. All transactions are recorded on the
Blockchain. It will allow households to monitor their daily
usage, and lower down the consumption if necessary. The
users can make more informed purchasing decisions according
to their budget plans. Energy trading, accompanied by smart
metering and Blockchain protection can boost the revenue of
a prosumer. Smart metering also serves as an instrument to
minimise the electricity bills and boost savings for a consumer.
D. Energy balance during peak conditions
Load forecasting allows us to predict the rise or fall in
energy demand. Consider the following two scenarios:
1) It is forecasted that there will be a sudden rise in demand
in the main grid for next one hour.
In the absence of micro-grid integration, the power
distribution companies have to purchase it from Energy
Exchange market. In the presence of connected micro-
grids accompanied by the security of Blockchain, they
have the option to contact aggregators of prosumers
in the microgrids of that region. Aggregators will play
a crucial role in establishing coordination between
prosumers. Aggregators can either supply power through
their prosumers’ energy storages or by decreasing power
consumption of their prosumers with their consult. In
both cases, prosumers can be given monetary incentives
proportional to their contribution, which will help
in attracting the rural population to adopt renewable
sources of energy. Such a system will also help lower
the dependence on conventional power plants to harness
electricity during peak hours.
2) Renewable energy generation is at its peak but according
to the forecast, supply will exceed the demand.
In the case when power generation of main grid exceeds
the consumption, the distribution companies will have
the option to contact aggregators of micro-grids. The
aggregators can store the excess energy with the use of
their prosumers’ energy storage systems which can later
be used for balancing peak demands. Prosumers can
benefit by providing their storage systems to the grid as
they can either use the electricity for themselves or sell
it when demand rises.
Thus, in a Blockchain-based smart grid model, major roles will
be played by aggregators of prosumers. Also, energy storage
systems which are necessary for renewable resources can now
generate revenue for its owners.
E. Load Forecasting
As mentioned in the Fig 2, renewable sources of energy
are accompanied by some uncertainty regarding generation.
Hence, load forecasting becomes essential, especially in rural
areas which become the targets of load shedding if any
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8th IEEE International Conference on Smart Grid
imbalance occurs in the main grid. Prediction of overall
electricity consumption as well as renewable energy generation
is crucial to avoid demand and supply imbalance in the grid.
Anticipation of the power consumption and generation for
upcoming days is based on the data of previous days. As
noted in [14], Big data plays a critical role in Smart grid,
with its increasing amount and visibility, which is accessed by
various electrical utilities as well as customers. Any tampering
or inaccuracy in this data may lead to misprediction, thus
causing imbalance in the grid and inconvenience to users
as well as energy wastage. It is important to store the data
in a tamper-resistant data storage system. Blockchain can be
used as a secure database to store data regarding quantity of
energy produced on a certain day, with specifications such
as temperature and humidity that dictate renewable power
generation. Blockchain is crucial for ensuring that the data is
legitimate and has not been tampered with. Blockchain makes
the information collected by IoT devices cryptographically
secure, and hence is critical for accurate predictions.
F. Blockchain for integration with main grid
Blockchain technology can serve as a tool to enhance
the security of the complex network formed as a result of
integration of micro-grids with the main-grid. Transparency in
transactions between conventional power plants, the renewable
power plants, micro-grids and the main-grid, as well as their
accuracy is supported by the implemented smart contracts.
Decentralized nature of the technology makes it resistant to
attacks which target central servers. Blockchain can promote
smooth functioning of the overall grid.
VI. A DOPTION CHALLENGES
1) Lack of physical macro/micro-grid connections:
India has a large population inhabiting diverse geograph-
ical terrains. Although each village has been electrified
according to the Indian Government, still all households
and enterprises do not have grid-connections. However,
there is willingness to invest in setting up physical
grid connections which is reflected in various proposed
schemes.
2) Performance Barriers:
One of the grave issues with the implementation of
Blockchain technology, especially in public networks, is
the time required to achieve consensus, verification and
appendment to the chain. Efficient consensus protocols
which consume comparatively less resources are being
researched for public, private as well as permissioned
Blockchains such as Proof of Stake, Proof of Elapsed
Time, Practical Byzantine Fault Tolerance (PBFT), etc.
3) Regulation challenges:
Blockchain technology is comparatively new and lacks
standardization. Research also points out that some fea-
tures of Blockchain are contradictory to some of the
existing regulations. As an example, consider the General
Data Protection Regulation (GDPR) of the European
Union (EU), which includes a ‘right to be forgotten’, for
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the privacy and security of data. However, Blockchain’s
immutability feature does not allow any data to be erased.
Thus, regulations need to be framed taking into account
the inherent characteristics of Blockchain.
4) Lack of expertise:
Blockchain technology has rapidly evolved over the last
decade. However, the it has not grown quantitatively.
The global demand for Blockchain experts has wit-
nessed an annual growth rate of 400% in 2019 [15].
Blockchain implementation has a complex nature and
thus, implementation of this technology on large scale
in the power sector will require practical and theoretical
expertise(qualitatively and quantitative both) in the field.
5) Energy Storage:
Provision for large energy storage systems becomes
mandatory for energy generation from distributed renew-
able energy resources, due to the uncertainty in power
generation. This adds to additional costs associated with
the installation of renewable energy generation systems.
There is need to establish cost-effective and eco-friendly
energy storage solutions.
6) Opposition from distribution utilities:
Blockchain is considered as the most disruptive tech-
nology ever born. It has the potential to eliminate the
role of every middle-man service. An example of this
is the GridPlus platform, implemented on the Ethereum
Blockchain. The key idea of GridPlus is that it will
operate as a commercial electricity retailer in the energy
trading deregulated market places. This will reduce the
operational cost of the smart grid making electricity
cheaper. However, the installation of such system for
energy management will require coordination from en-
ergy distribution companies accompanied with a change
in their roles, for example as aggregators of prosumers
in a region.
VII. C ONCLUSION
In this paper, we discussed the major challenges that cause
obstruction to rural electrification in India. We also proposed
a Blockchain-based smart grid model to facilitate reliable
and adequate power supply to the rural regions. Adoption of
micro-grids supported by Blockchain networks appears to be
a viable solution for India because it can provide electricity
at lower costs and also ensure the accuracy of transactions. It
is capable of improving the quality of electricity supply while
promoting revenue generation from renewable sources. The
implementation of Blockchain appears to be inevitable, but the
challenges related to it must be overcome before embracing
Blockchain technology.
Future work will focus on further investigation and imple-
mentation of the proposed Smart Grid model.
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