The electricity sector contributes to huge carbon emissions every year. Our homes use energy from the grid, we pay our bills, and cycle continues. Those with rooftop solar, excess energy produced by solar panels is sold back to the grid. Blockchain technology can help our homes to get a much cleaner energy. Blockchain combined with Internet of Things (IoT) based smart devices can allow design and implementation of various applications for solar. For example, IDEO CoLab is using blockchain technology and IoT to build an “Internet-Connected Solar Panel”.
Block Chain is a technology which consist of decentralized, distributed ledger that hosts shared records. It consists of growing list of records called blocks, which are linked using cryptography1. Each block is chained to the previous block in linear order using a cryptographic hash, which helps the records to be immutable and any attempted changes are visible to the all participants. It allows these distributed ledgers to be shared by anyone with appropriate permissions. The blockchain is the second generation of Internet with facilitates peer-to-peer transactions without any intermediary such as bank or governing body. Taking proper care of flaws related to privacy and security of records, blockchain validates and keeps a permanent record of all transactions. The blockchain can hold any legal document, from deeds and marriage licenses to educational degrees and birth certificates. The Internet of everything needs a ledger of everything: the blockchain is a truly open, distributed, global platform that fundamentally changes what we can do online, how we do it and who can participate2.
Blockchain is categorized into three type: public, private and Consortium blockchain. Public blockchain allows access to anyone who wants to be the part of the network. Private blockchain includes the centralization of write permissions to one party and read permissions can be with public or private. Consortium blockchain represents a hybrid between a public and private blockchain.
Blockchain technology can be used to solve real world problems in the energy sector using decentralized technology. Various diverse use cases of Blockchain includes – transactive energy, microgrids, community solar, renewable energy procurement and trading, electric vehicle charging and demand response.
- The real potential of blockchain technology unleashes with IoT. In an IoT environment, machine-to-machine (M2M) communication can be managed easily with blockchain leveraging its benefits like immutability, speed and automation. A digital grid or smart grid is an example of IoT enabled technology that makes use of few sensors, wireless communications and big data analytics to remotely monitor, control and automate the network. Digitized grids with digitally-enabled demand response and additional storage could by 2040 can increase the solar PV across EU from 7% to 1.6% and avoid 30 Mt. of CO2 emissions annually, according to the International Energy Agency, European Commission modelling3. With blockchain technology, the demand can be attributed to specific consumers down to five minutes intervals or even a minute-by-minute basis, logging when, where and by whom the electricity is generated. If coupled with AI, blockchain technology can simplify process for forecasted or planned consumption against customer’s actual consumption as recorded by their meters.
- Blockchain, as part of Transactive Energy (TE) platform can help to increase the power quality by providing dynamic balance of supply and demand across the entire infrastructure ensuring the proper functioning of power network. Block chain technology enables a secure peer-to-peer energy market and has been demonstrated in Brooklyn microgrid project4. Under this project, the homeowners including schools, apartments and gas-stations can trade a very small amounts of green electricity without any intermediaries.
- Blockchain technology is getting used in P2P electric vehicle (EV) charging, which, connect EV drivers to share the charging stations with each other. Residential and commercial EV owners can make a profit by allowing others to access their chargers and drivers have the flexibility to charge their vehicles at different locations.
- The potential of blockchain lies in keeping the track of renewable-energy certificates (REC) instead of depending upon the intermediaries between sellers and buyers for the generation of per unit of electricity.
Blockchain is emerging as an important tool to redefine various frameworks under which information can be used for transactional purposes. For example, Smart cities are one of the focus areas of governments across globe. India launched its Smart Cities Mission with the aim of developing 100 smart cities. Blockchain based smart solutions can help accelerate the enforcement of real time differential pricing models to contain energy usage.
1. “Blockchain”, https://en.wikipedia.org/wiki/Blockchain.
2. “Blockchain Revolution”, Don and Alex Tapscott, Brilliance Audio, 2016, https://blockchain-revolution.com/
3. “Digitalization and Solar: Task Force Report”, October 2017, Solar Power Europe, http://www.solarvalue.it/wp-content/uploads/2018/02/Digitalisation-and-Solar-report-SolarPower-Europe-MEDIUM-RES-1.pdf
4. “Blockchain – an opportunity for energy producers and consumers?”, https://www.pwc.com/gx/en/industries/assets/pwc-blockchain-opportunity-for-energy-producers-and-consumers.pdf