Potential of Blockchain in the Energy Space
Blockchain, the distributed ledger technology, is rigorously disrupting the industrial ecosystem. Industries like finance and supply chain management have already adopted Blockchain in their operations that is helping them save costs and time while making the management transparent. The technology is gradually permeating to other sectors, most prominent of them being the energy space, where, according to its advocates, it can change the way we function.
Blockchain can give the energy sector the much-needed makeover. Below are a few ways by which this technology will bring innovation and efficiency in this trillion-dollar industry.
Decentralized Energy Trading
Blockchain creates a peer to peer platform for prosumers (those who consume and produce electricity) and consumers to interact with each other. The elimination of intermediaries or third-parties results in lower transaction costs. It is like providing consumers with a transparent, auditable, secure and private online marketplace, where they can compare and choose from multiple electricity providers, which suits their needs the most. An added benefit will be the employment of smart contracts to automate and securitize the transaction while making it transparent.
After the completion of each transaction, the data will be stored on the Blockchain and grid will be used to deliver the energy. Since there will be no third-party to charge commissions, electricity will be cheaper.
Companies like JustPowerIt are trying to achieve this objective with their Blockchain-based Synergy platform that allows consumers and producers to indulge in peer-to-peer energy trading.
Employing IoT Devices for Energy Metering
Internet-of-Things (IoT) devices are basically communication platforms that wirelessly transmit information over a network. It’ll be an innovative and smart way to collect energy consumption and production data if IoT devices are integrated with traditionally used smart meters. This data can then be verified on the Blockchain network and stored in the system securely.
Blockchain will make this data accessible by all entities; producers, prosumers and consumers. The first two categories can utilize this data to keep a track of their energy generation and bill the customers. The latter category will be able to analyze their consumption pattern and make the necessary alterations.
Tracking Renewable Energy Certificates
If you intend to purchase only renewable energy, then being completely sure of the authenticity of its source is extremely necessary. Blockchain’s immutable nature allows the users to ensure that the transaction made is coming from a producer with Renewable Energy Certificates (RECs).
A REC is a record that validates an entities possession of one megawatt-hour of renewable energy. These records are crucial for customers in order to meet their green standards as they prove the ‘renewability’ of their energy.
If the record keeping system of RECs is put on Blockchain, then it’ll be easier for the authorities as well as the customers to keep a track of issued RECs. The distributed and transparent ledger will make sure that no miscounting occurs when it comes to recording the amount of energy generated. The tamper-proof timestamping and decentralized data storage will establish a more transparent and dependable certification system.
Blockchain technology is at the heart of the fourth industrial revolution and energy sector won’t be left behind. This inclusive technology holds great potential to democratize and decentralized energy production and consumption. It will not only be a technology for energy officials, but also for the common population that has the ability to produce renewable energy but couldn’t access the perfect trading platform. Those households will be incentivized to be a part of this new energy ecosystem resulting in a more sustainable energy economy.
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