# The Potential of Blockchain Technology and Smart Contracts in the Energy Sector: A Review
## 1 Introduction  
Rising energy prices in recent years have been a cause for global concern. In 2022, the EU recorded historically high energy prices, according to the EU Council. This price surge is attributed to an increased demand for energy following the COVID-19 pandemic, the war in Ukraine, and the acceleration of climate change. In 2022, Russia's decision to suspend gas supplies to most EU member states increased gas and electricity prices in the EU. As an example, between January 2021 and January 2023, domestic industrial energy producer prices increased by 127% while consumer prices increased by 63.5%. Considering the high volatility of energy prices, as well as the fact that the energy sector is undergoing a period of digital transformation, blockchain technology and smart contracts potentially offer the ability to revolutionize the energy sector by providing a secure, transparent, and efficient platform for energy transactions. Blockchain is a distributed ledger technology that enables peer-to-peer (P2P) transactions with no central authority or intermediary oversight body [1]. This technology can be used both to support complex energy transactions between consumers and energy producers and to develop new business models such as peer-to-peer energy transactions [2]. The use of blockchain in the energy sector has been gaining momentum in recent years due to its ability to provide secure, transparent, and efficient transactions. Energy companies can reduce costs associated with traditional energy trading processes, such as transaction fees and administrative costs [3]. Furthermore, blockchain technology can help to improve the accuracy and reliability of energy data, which can lead to better decision-making and improved customer service [4]. Blockchain technology can also provide increased security for energy transactions. By using cryptographic algorithms, blockchain technology can ensure that only authorizedusers have access to energy data and transactions [5]. Consequently, it helps protect against cyber-attacks and other malicious activities by providing an unalterable record of energy transactions, which contributes to fraud and manipulation prevention [6]. Beyond the technological benefits, on a business level, blockchain technology can also enable the development of new business models in the energy sector. For example, it can enable P2P energy trading, that is, the ability for consumers to buy and sell energy directly from and to each other without the need for an intermediary. This could potentially lead to lower energy prices and more efficient energy markets [7]. The purpose of this paper is to review and assess the application of blockchain technology and smart contracts in the rapidly evolving energy market. To this end, we identify their characteristics, the challenges, and their potential under the prism of a detailed literature review. Also, we will attempt to identify and qualitatively evaluate the most recent, and mature research efforts in the field. More specifically, this work:  
* presents the characteristics and advantages of blockchain technology to justify its adoption trend in the energy sector. Furthermore, an analysis of the concept, the properties, and the use cases of smart contracts is performed. Consequently, their relation to the different forms of energy trade (P2P, P2G, EVs, EAAS, etc.) is thoroughly described. At the same time, the limitations and challenges that have been recently encountered by the scientific community are mentioned. * carries out a comprehensive and scientifically based literature review, including the progress made in recent years in the field. The scientific articles included are classified into three categories (Energy Market and Regulations (EMnR), Energy Management and Operations (EMnO), and Business Models and Applications (BMnA)). In addition, the independent smart contract technology (SCT) class that focuses on the technological aspects of developing smart contracts is identified.