Why Blockchain Technology Doesn’t Scale for Energy Markets…
… the way you expect.
Local energy markets are inevitable
Low cost solar, batteries, and electric vehicles are changing the physical and financial management of the grid. Utility professionals expect that the myriad of new potential transactions brought on by low cost solar, batteries, and electric vehicles, will increase the demands on their meter-to-cash system while supporting a local electricity market.
Utility billing is complex
Billing is an essential process for any business and our electric utilities are typically responsible for millions of customers and thousands of rates, not to mention many taxes and a myriad of other unique charges. Manually read meters have largely given way to automatically read meters that have done their part to improve aspects of the billing process and add complexity.
Utility billing systems, like most enterprise software, rely on a central system of record that acts as their source of truth for billing purposes. This database must be capable of holding and processing all of the transactions a utility will bill against. Imagine a 6,000,000 customer utility with meter reads every 15-min. That translates to at least 7,000 transactions/sec and this is one of the key bottlenecks enterprise architects must design their systems to support. Consider that a utility may batch process a days worth of reads over 6 hours, this jumps to 28,000 t/s.
What happens when the system of record is no longer a database, but the network?
For conversations sake, let’s say our 6 million customer utility has 3,000 customers per sub station across 2,000 substations. If each substation network had its own audit ready and reliable record of all the transactions, then your distributed and/or decentralized system only needs to process a paltry 4 transactions per second.
Blockchain to the rescue
The Omega Grid blockchain architecture, designed by Massimo Di Pierro and the Omega Grid team, stores a history of each nodes bid, orders, and confirmations of delivery locally and securely on each of our auditable permissioned nodes. Utility transactions and peer-to-peer contracts can confidently reference these records for billing, settlement, and other smart contracts. This is how we solve the “Oracle Problem” (no, not the big red Oracle), the type of oracle you need to reference for your smart contracts to actually be smart.
Enterprise architecture is a matter of trade-offs and we are looking forward to a discussion around the new bottlenecks that must now be considered in this architecture. Feel free to comment, clap away, and follow us to stay tuned for our conversation around the new bottleneck, and other fun #utility #blockchain #energy topics in our future articles.
