Today, the deployment of blockchain in the utility sector has become a trending topic among the industry expert community and startup investors, with applications ranging from network transactions, financing, and transparency in the supply chain. This technology is deemed ideal for utilities as it can simplify the formation of automated, verifiable, and transparent records of power produced and its consumption.
Major utilities have started to realize its importance and are ready to take advantage of it while enduring the intimidations from blockchain-compatible challengers. This article discusses various ways energy players can utilize this technology and outpace their competitors.
BLOCKCHAIN LEDGERS TO REDUCE INACCURACIES
Renewable Energy Certificates (RECs) granted to solar producers mainly rely on generation estimates rather than actual data. These inaccuracies can be diminished by combining sensors with smart contracts that record data on a blockchain ledger and issue certificates based on the actual energy production value. Here, central agencies do not have to re-verify the generated data or work through costly and inaccurate estimates. In this way, blockchain also reduces costs for public agencies managing RECs by streamlining the verification of trades and indexing of data.
For example, IDEO Colab has built a proof-of-concept system integrated with the LINQ platform and NASDAQ hardware and filament. It leverages digital sensors with blockchain capabilities to trade RECs to producers for each KWH their solar panels produce, allowing solar producers of all sizes to monitor, quickly prove, and trade power.
BLOCKCHAIN FOR INCREASING GRID EFFICIENCY
The relatively low transaction cost of blockchain allows small energy producers to trade excess energy and increase grid efficiency. Today, several smart contracts streamline the real-time coordination of data generated from solar panels and various other installations and execute sales contracts that allow for mutual energy flows throughout the grid.
Start-up LO3 has utilized the Ethereum blockchain to directly assist consumers in purchasing power from local producers and a microgrid that exists on existing infrastructure. Similarly, Brooklyn MicroRid, one of the projects supported by LO3 as well as Siemens, is working to build a microgrid in the New York borough of Brooklyn.
BLOCKCHAIN SIMPLIFIES ENERGY DISTRIBUTION
Blockchain, combined with smart financing agreements, digital sensors, and mobile applications, can distribute energy in small discrete packets in areas with limited access. It allows a local owner of solar generation infrastructure to trade power with neighbors. The solar system owner installs a blockchain-compatible solar panel on credit from the installation program, using a mobile phone to pay for the equipment in installments and incur small fees.
Once payment is completed for the solar installation, the owner can sell small discrete amounts of solar energy to nearby customers as they need electricity in their area. As explained above, electricity requests and payments can be made via mobile applications.
BLOCKCHAIN TO BALANCE SUPPLY AND DEMAND
With the continued scaling of wind and solar energy, utility industries are increasingly challenged to balance supply and demand. This requirement has created a demand for flexibility services to reward backup supply sources that respond quickly during shortages or manage energy demand to better match supply.
For example, Tennet, the operator of the transmission system in Northern Europe, recently launched pilots in the Netherlands and Germany to use blockchain to offer such flexibility services to the grid. Its pilots integrate storage assets, household batteries, and electric cars into electricity markets.
Similarly, the UK-based electron utilizes blockchain technology to create a flexible marketplace platform that allows real-time transactions to balance demand and power supply.
BLOCKCHAIN FOR MONITORING AND MAINTAINING INFRASTRUCTURE
Blockchain technology can be used by the utility market to enable more effective tracking and management of the electric industry’s infrastructure based on real-time secure data transmitted by sensors. In case of irregularities, smart contracts can facilitate maintenance, leading to faster response times. Here, the data is considered safe and secure as it is made available only to nodes of the blockchain network.
Furthermore, blockchain adds a layer of coordination and security to existing digital pilots, enabling immediate and accurate collation and interaction of data between utility maintenance, equipment providers, and emergency response teams.
BLOCKCHAIN ACCELERATES PAYMENTS
Blockchain has simplified payments at electric vehicle charging stations by simply displaying real-time pricing data to the driver. This system autonomously manages the charging network, presenting drivers with nearby station locations and their availability. For instance, if one of the blockchain microgrids is established in the area, the electricity costs of each station can be set by energy providers and residents. Thus, drivers can then securely and instantly pay for power using smart wallets.
In Germany, people use an app by its name – Share & Charge, which operates on Ethereum technology, interconnecting electric vehicles with available commercial and residential charging stations and enabling smart payments. This system is also being piloted in California using Emotorwerks’ Juicebox EV chargers. By creating a broader and more efficient charging network, blockchain technology promotes the rapid adoption of electric vehicles.
CONCLUSION
Although blockchain is still three to five years away, utilities can unlock significant revenue sources by applying this technology to their vast data stores. Hundreds of startups are already considering this lucrative technology, both at the enterprise and consumer levels, with ongoing support from global energy and technology companies.
