FAB Use Cases: Energy
In this series, we tackle different potential use cases of Fast Access Blockchain and how we can build a better world through our solutions.
New Applications, New Business Models, New Possibilities
Applications which are an ideal fit for blockchain technology have the following characteristics:
- Involve multiple organizations
- Where trust is key, or trust is presently severely eroded
- Proof is key
- Involve exchange/transfer of assets or value
- Involve data sharing or presently suffers from silo’d data
- Benefit from micro transactions/streaming
- Have opportunities for new business models, products or services
Energy, especially electricity, has been undergoing a decentralization transformation over the last decade or so, in some ways analogous to blockchain technology. Millions of people now generate electricity locally and even off-grid. Along with traditional energy sources, renewable energy such as solar and wind are rapidly moving us towards a decentralized future, for example, using rooftop PV solar systems, or waste bio-digesters at a farm. The ability to transact, that is trade energy and energy services in exchange for value, is an essential lubricant for operating our energy system.
In the past, transactional relationships could only be madewith the electric utility, but with blockchain technology, these transactions can now be done peer-to-peer, so you can sell your excess solar energy to a neighbor that maybe you don’t even know. This can be done by smart contract enabled autonomous agents working on your behalf to optimize any combination of parameters that you specify.
With the electric cars and V2G (vehicle-to-grid) and G2V (grid-to-vehicle) technology, the car battery can be used to store excess solar energy generated in the daytime and resupplied to the grid in times of peak load to reduce peak demand requirements on fossil fuel based generation, provide short bursts of “back up” power in emergency conditions, or help with real-time balancing of supply and demand. This can happen regardless of where the car is plugged into the grid, at home, work, or at the mall. (The same can be done with residential energy storage systems such as the Tesla Powerwall.) In the industry, these are called ancillary services, which are necessary services that are provided and paid for just as the energy we consume must be generated and paid for.
Smart contract enabled autonomous agents can work to optimize any combination of specified parameters such as carbon emissions, peak demand, revenue or battery life within prescribed constraints such as maintain a minimum 85% charge on your EV battery because you have a long trip planned on the weekend or similarly, your home battery because the weather forecast calls for cloudy conditions for the next 2 days. Even without a storage battery or PV solar panels, you can provide what is called Demand Response or load shaping services, such as responding to requests to reduce power consumption during peak demand periods and be paid for it. This may be for example, reducing your AC setting during the peak period or pre-cooling your home/office in the morning such that the AC can be turned off during the afternoon peak if it is forecast to be a very hot day.
With blockchain technology, transactions can be made with low transaction cost, allowing settlement of more frequent transactions (e.g. every minute instead of monthly in present day systems), and allowing possibilities of micro-transactions such as payment for inductive EV charging on e-charging roads or while stopped at a stop light. Other new possibilities such as a cryptocurrency mined by production of renewable energy such as solar are also emerging. This cryptocurrency can then be traded in exchange for Bitcoin or FABcoin, for example.
Other applications in energy that match well with the characteristics and benefits of blockchain technology include carbon credit accounting and trading, simplifying or eliminating clearing processes for trading resulting in faster settlements, preventing double counting of Renewable Energy Certificates (RECs) and simplifying and reducing the cost of REC transactions. Additional possibilities include micro-grid energy resource trading and optimization, and streaming pay-as-you-go improvement on prepaid meters that eliminate the hassle and overhead of prepaid cards.
In all of these applications, we see that blockchains can function as an internet of energy transactions, enabling mass co-operation and exchange of energy, energy services and value between everyone to propel us towards a sustainable energy future.
Written By: Eugene Cofie and Ken Tang
Fast Access Blockchain