Blockchain technology’s potential to transform the modern grid
Blockchain technology could help the energy industry to deal with their two major problems: inefficient renewable energy tracking systems and how to maximise the value of the energy transmission system, experts suggest.
Traditionally, most companies rely on certificates to track renewable energy. When a factory generates renewable power, meters record data on the spreadsheet and send the sheet back to the registered provider. A second set of intermediaries brokers deals between buyers and sellers of these certificates, and certificates need to be verified by other parties when they are bought.
This kind of system is universally considered to be inefficient, costly and, most importantly, concerned its lack of transparency.
‘The way we manage these certificates “sucks,” and it’s holding up investment in renewable power, ‘ Says Jesse Morris, an energy expert at the Rocky Mountain Institute. ‘A new system based on blockchain, the technology at the heart of Bitcoin and other digital currencies, could fix this.’
Blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record virtually everything of value. In this case, renewable energy transaction data can be written and delivered among dealers and clients directly.
Furthermore, many experts believe that this technology is possible to initiate a fundamental transformation of modern energy grids.
So far, most power plants distribute energy over transmission and distribution lines, but in recent years some smaller ‘distributed’ power generators and storage systems, like rooftop solar panels and electric-vehicle batteries, have been connecting to the grid. However, the most efficient way to use those generators and systems is for owners.
‘It generally takes 60 to 80 days for an electricity producer to get paid.’ Said Jemma Green, cofounder and chair of Power Ledger, an Australia-based Blockchain startup that allows producers to trade energy peer-to-peer with consumers. ‘With a blockchain-based system, producers can get paid immediately, so they need less capital to start and run a generating business.’
Except for Power Ledger, several firms have begun to develop or revealed blockchain-based energy platforms, including Conjoule, supposed to be operated next year, and Drift, operated in New York already.
‘[It] could add a level of sophistication to the market by enabling those more granular transactions.’ Said Green.