
Blockchain and the Energy Future: Microgrids Part 3
If you want to know what a microgrid is and the great benefits that this solution can bring to our power grid, its safety and reliability regarding natural disasters or bloackouts, the environment, our community and the economy; I invite you to read the first and Second article in this series that I have published.
The new energy model drawn through the analysis of the different benefits of microgrids made in my previous publications, now, thanks to the introduction of the blockchain technology into the equation, could catalyze the final phase of an unstoppable change towards a totally decentralized model, safe and disintermediated, that can help us overcome the great challenges we face such as poverty, inequality, the shortage of non-renewable resources, the already known by all, climate change, and something very important, the construction of a new economic model that allows us to continue create, grow, change and evolve.
First indicate that Blockchain is the technology that supports bitcoin and another huge amount of new cryptocurrencies, and that it has the potential to drive the definitive change of our energy model, initiated some time ago by renewable energies, batteries, energy efficiency, the digitalization and the Microgrids. This technology is a tool that although still in its infancy, promises to decentralize, disintermediate and participate in the generation of value to all. If it is proven to be scalable, solutions based on blockchain technology will drive the transition to what the energy industry calls “a distributed world”, in which large, small renewable generation systems and other connected systems and devices interact.
Although each microgrid can vary greatly from one project to another according to design criteria and requirements, in general they all allow the use of clean energy sources, more efficient energy uses, reduction of generation and distribution costs, reduction of maximum demands of energy, a high degree of availability, reliability, quality of supply and electrical consumption, the economic adaptation of supply and demand and especially a bidirectional flow of energy among multiple prosumers, something that is a great benefit for the system; but this same variable and distributed nature of the resources notably increases the complexity of tracking, traceability, recording and managing the balance of the energy generated, stored, consumed and shared within the microgrid. It is here, for example, that blockchain technology by its nature, together with adapted smart meters, would allow the supply, storage, energy consumption and associated financial transactions to be monitored and recorded in a cost-effective, transparent and more secure manner.
On the other hand blockchain and smart contracts allow prosumers and consumers to make exchanges within a microgrid of energy between equals, which facilitates P2P trade and the creation of a safe and transparent virtual energy market, governed by incorruptible algorithms, without central server, free from intermediaries and without the need for any central authority. Members can access all the required information, manage and control their entire energy system and their preferences through their mobile device, computer or other intelligent systems.
For example in a “zone” interconnected by a microgrid, one of its neighbors, “Veronica”, has its photovoltaic panels installed on its roof generating more energy than it needs and decides to export that excess energy to the microgrid by establishing the conditions (minimum price per kWh for example). On the other hand “Juan” that does not have photovoltaic panels, requires energy and accepts the established conditions (through an application connected to his meter enabled with blockchain). “Veronica and Juan” are automatically paired (through algorithms that allow dynamic commerce) and the smart contract is executed as the criteria defined by both parties are met. However, if the smart contract programmed according to the criteria defined by “Juan” for the purchase of energy, identify that the offer of a nearby renewable generation company is more convenient, then start the purchase process with this company automatically.

All the traceability of the energy generated, exported and consumed, and the associated monetary transactions are automatically recorded and encoded in the blockchain in a precise, secure, distributed, transparent and incorruptible manner.
All this operation as we have analyzed will generate great benefits as they will help reduce energy prices, losses (transmission and distribution), increase security of supply, reliability, reduce investment in infrastructure, improve the return on investment of the Veronica’s installation, will improve the family and zonal economy, and will take care of the environment, since the renewable energy generated locally is consumed.
On the other hand, when in the microgrids area there is not enough sun and the energy generated by the prosumers is not enough to cover their own demand, the intelligent contract of the members of the community will be aligned with the power offers opened by power plants, generators or other aggregators from other areas or regions where the climate is favorable for solar and wind generation. Blockchain and smart contracts have the potential to help us improve security and supply quality, efficient integration of renewable energies in the energy matrix of a country or zone, improve the coordination of different variable and distributed resources, and improve accessibility and affordability of energy to all members of the community.
These examples are a small part of the potential that the blockchain technology (smart contracts and dapps) has and that if all the companies that currently work on its implementation, do not make the mistake of over valuing its potential in the short term, we can generate as I indicated in the second part of this series “a new framework or model of development that will be 100% faithful to all the potentialities and ideals that drive these technologies”, this will make it possible to overcome the increasing challenges, achieve the proposed goals and the results expected by all members of the community.
There is still much to discover, especially the implications for our prosperity that will generate a protocol that enables people to create trust through incorruptible algorithms. For the first time in history we can build a reliable development model based on the collective capacity and interest of all members of the community and not a group of large companies, intermediaries and politicians.
With the above I do not mean that everything will change tomorrow thanks to blockchain, since this paradigm shift requires the specific framework that we do not yet have and many years of work, testing and collaboration of all sectors to reach the state that allows us continue to change and evolve under a new model, where prosumers will be one of the fundamental pillars on which our prosperity and our future are based.
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