Today, blockchain deployment in the utility sector has become a trending subject among the industry expert community and the start-up investors, with applications stretching from grid transactions, financing, and transparency in the supply chain. This technology is deemed ideal for utility as it can simplify the formation of automated, auditable, and transparent records of produced power and its consumption.
Leading utilities have begun realizing its importance and are willing to take advantage while enduring intimidations from blockchain-enabled challengers. This article discusses various ways in which energy players can use this technology and outrank their competitors.
Blockchain Ledgers to Reduce Inaccuracies
Renewable energy certificates (RECs) given to solar producers are primarily dependent on generation estimates rather than real data. These inaccuracies can be lessened by pairing sensors with smart contracts that record data to a blockchain ledger and issue certificates based on actual energy generation value. Here, the central agencies need not again verify the generated data or work through costly and inaccurate estimates. This way, blockchain also reduces costs for public agencies administering RECs by simplifying the trade verification and data indexing.
For example, IDEO CoLab has built a proof of concept system integrated with Nasdaq’s Linq platform and Filament’s hardware. It leverages digital sensors with blockchain features to trade RECs to producers for each kWh their solar panels produce, letting solar producers of all sizes monitor, prove quickly, and trade power.
Blockchain to Upturn Grid Efficiency
The relatively low transaction cost of blockchain lets smaller energy producers trade the excess energy and increase grid efficiency. Today, several smart contracts streamline the real-time coordination of generated data from solar panels and various other installations and perform sales contracts that let mutual energy flows throughout the network.
Start-up LO3 has been utilizing Ethereum blockchain to directly assist consumers in purchasing power from local producers and from a micro-grid that sits on current infrastructure. Similarly, Brooklyn Microgrid, one of the projects supported by LO3 as well as Siemens, is working to build a microgrid in the New York City borough of Brooklyn.
Blockchain Simplifies Energy Distribution
Blockchain amalgamated with smart financing arrangements, digital sensors, and mobile apps can distribute energy in small, discrete packets in areas with limited access to it. It allows a local owner of a solar-generation infrastructure to trade power to neighbors. The solar-system owner installs a blockchain-enabled solar panel on credit from the installer, with the aid of a mobile phone to pay for the hardware in episodes and incurring small fees.
Once the payment is completed for the solar installation, the owner can sell small, discrete amounts of solar power to nearby customers as they need energy in their region. As explained above, both the power requests and payments can be made through mobile applications.
Blockchain to Balance Supply and Demand
With the continuous scaling of wind and solar energy, utility industries are increasingly challenged to balance both the supply and demand. This requirement has created a demand for flexibility services, to either recompense backup sources of supply that respond quickly in times of shortage, or regulate power demand to better match supply.
For example, TenneT, the Northern European transmission-system operator, has recently launched pilots in the Netherlands and Germany to use blockchain to offer such flexibility services to the grid. Its pilots integrate storage assets, from household batteries and electric cars into power markets.
Similarly, the UK-based Electron is leveraging blockchain technology to build a flexible marketplace platform that lets real-time transactions balance the demand and the power supply.
Blockchain to Monitor and Maintain Infrastructure
Blockchain technology can be used by the utility market to enable more efficient tracking and managing of power-industry structure, dependent on real-time, secure data transferred by sensors. In case of any irregularities, smart contracts can facilitate the maintenance, leading to faster response times. Here, the data is considered safe and secure since it is made available only to the blockchain network nodes.
Besides, blockchain adds a layer of coordination and security to the existing digital pilots, letting immediate and precise data collation and interaction between utility maintenance, hardware suppliers, and emergency response group.
Blockchain Quickens Payments
Blockchain has made payments at electric vehicle charging stations simpler by just displaying driver’s real-time pricing data. This system autonomously manages the charging-station network, presenting drivers the nearby station’s locations and whether they are being utilized. For instance, if any of the blockchain micro-grids are established in the area, power costs at each station can be set up by grid and residential power suppliers. So, the drivers can then pay for the power securely and instantly with smart wallets.
In Germany, people use an app by name – Share &Charge, which operates on Ethereum technology, interconnects electric cars with obtainable commercial and residential charging stations, and enables smart payments. This system is also piloted in California using eMotorwerks’ JuiceBox EV chargers. By letting a more extensive and more efficient charging network, blockchain technology encourages quick adoption of e-vehicles.
Although blockchain at scale is still three to five years away, utilities can unlock significant revenue streams by applying this technology to their vast data stores. Hundreds of start-ups are already eyeing this lucrative technology, both at enterprise and consumer levels, with constant backing from global energy and technology firms.