# The Potential of Blockchain Technology and Smart Contracts in the Energy Sector: A Review
## 3 Research Methodology and Literature Classification
### Literature Classification
#### 3.2.1 Energy Market and Regulations (EMnR)
According to [PERSON] in [43], blockchain technology has the potential to revolutionize the energy sector by providing a secure, transparent, and efficient platform for energy transactions, and start-up initiatives have developed energy solutions based on blockchain and distributed ledger technology. The paper focuses on issues related to energy traceability, transparency in energy tariffs, and the security of energy transactions. It addresses the need for a tamper-proof platform for energy networks and the regulatory framework required for renewable energy consumers and communities. Finally, the paper presents a concept of a possible application of blockchain technology, through a smart contract defining an energy token, to manage the flexibility applied to a microgrid from the Distribution System Operator (DSO) point of view. The energy token is valued with a dynamic price, taking into account the state of the network, the availability of energy, and production forecasts. [PERSON] et al. in [45] provide an overview of Distributed Ledger Technologies (DLT) and their potential applications in the energy sector. It discusses the benefits and limitations of DLT and identifies technical challenges that need to be solved to enable widespread usage of DLT in energy systems. Furthermore, this work aims to provide solutions for scalability issues, which are a complex and rapidly evolving area in DLT. Balancing technical depth with accessibility for a diverse readership poses another challenge. It also categorizes energy applications and platforms, and presents several solutions for each category. According to the paper, blockchains can enable complex mechanisms through smart contract capabilities, and on the other side, DAGs (Directed Acyclic Graphs) offer processing speed and scalability of financial transactions. According to [PERSON]. [PERSON] and [PERSON] in [50], developed countries dominate the basic research of energy blockchain because they have mastered more advanced blockchain technology, while developing countries are playing an increasingly important role in the global energy blockchain research system. Also, an important challenge for developing countries to develop energy blockchains in the future is how quickly they can build a complete distributed power system. Furthermore, ongoing research in the field focuses on renewable energy trying to solve the problems in its development process and providing better solutions for the replacement of fossil energy. [PERSON] and [PERSON] in [52] address the cash flow volatility risks faced by solar power producers (SPPs) due to fluctuating electricity prices and unpredictable weather-dependent energy generation. The challenges include the need to mitigate these risks to secure favorable financing terms, the limited attention given to long-term volumetric risks, and the scarcity of weather derivative mechanisms tailored to SPPs. Additionally, the emerging field of Decentralized Finance (DeFi) introduces new risks that require assessment, and the blockchain-based approach suggested in the paper is still in its early stages, necessitating a better understanding of its risks and potential. They propose a solar radiation-based weather derivative smart contract arrangements on a blockchain marketplace to address some of the main limitations of traditional instruments. These smart contracts are analytically evaluated, and a suite of novel smart contract autonomous mechanisms is presented. Results emanating from notional simulations indicate that the proposed approach could be more suitable for hedging the volumetric risks of solar power producers than traditional instruments.