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Blockchain technology can create a paradigm shift in highly regulated electricity to a more decentralized and transactional environment, according to GlobalData.
The key challenges are high operating costs, outdated networks, security, regulatory compliance and personalized customer service. Archi Dasgupta, GlobalData's Disruptive Tech Analyst, comments: "Blockchain could be the main enabling factor for decentralization, democratization and energy liberalization Using smart contracts, technology can enhance bilateral agreements in real time by eliminating point delays intermediates that lead to a significant reduction in operating costs of utilities ".
The decentralization of power through the blockchain has given rise to trading platforms such as the one implemented in the Brooklyn microgrid by LO3 Energy where energy can be bought or sold directly within a peer-to-peer network ( P2P), eliminating the need for intermediaries. This will not only reduce the costs of both utilities and consumers, but also the transparency of the network.
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The leading Australian company, Power Ledger, known for the development of decentralized blockchain energy trading platforms, has launched its first commercial deployment in the United States. Its distributed P2P blockchain network allows consumers and businesses to sell their solar surplus in their neighborhood without an intermediary.
Thanks to its intrinsic traceability feature, blockchain can improve tracing of faults in the power grid, which has never been a simple task. The technology can be used to stabilize and modernize the network in many ways.
The European transmission system operator The TenneT pilot with Sonnen using blockchain based on IBM's Hyperledger framework may allow energy storage systems within the network to absorb or discharge energy into excess in a few seconds and minimize transmission blocks.
Smart meters have made a buzz in past years of power for their consumer benefits. In a centralized network, however, they did not offer desired results, leaving them eager to experiment with their data on a decentralized network such as blockchain. The Lithuanian startup, WePower, worked in the same way in collaboration with the transmission system of Estonia Elering. It has managed to load 26,000 hours and 24 hours of data on energy production and consumption from the smart meters of Estonia on the Ethereum blockchain, which led to the creation of 39 billion negotiable smart energy tokens.
P2P power networks are able to create a decentralized market that connects electric vehicle drivers (EVs) and owners of charging stations for mutual benefits. The German startup, Motionwerk, has launched a P2P-based share-sharing project based on blockchain Share & Charge, which allows users to share their private electric charging stations for money.
This space is, however, still largely dominated by proof-of-concept projects and small-scale production implementations. Its large-scale commercial adoption is between three and five years, as there are several challenges to be faced, including installation costs, the need for power to perform the installation and, above all, the need for to develop common standards and regulations.
"Electric utilities are similar to banks in the way they are centralized and highly regulated, so it is crucial to create an ideal solution for implementing transformation technologies such as blockchain," concludes Dasgupta.
