The potential of Blockchain to bring efficiency and reliability into the value chains of various industries, including the energy sector, is constantly evolving.
A global economic survey suggests that 10% of world GDP could be stored in blockchain by 2027. Large investments in blockchain are under way.
The evolution towards a smarter network is the most complete and disruptive development to face the energy sector since mass electricity distribution was introduced for the first time more than a century ago.
To achieve the government's ambitious renewable energy goals, network integration solutions are needed to integrate renewable energy sources with the grid. As one-way flows are evolving into multidirectional digital energy and information flows, the resulting complexity requires a new integrated and secure approach to delivering the right IT solutions. Potential applications for blockchain technologies lie here. Blockchain offers an efficient, secure and cost-effective way to manage transactions through a decentralized tamper-proof registry system.
For example, blockchain technology can be used to create transactive energy platforms that enable the safe trade of peer-to-peer (P2P) energy within communities. LO3 Energy and Siemens have collaborated on the Brooklyn Microgrid Project, which allows residents to produce through the solar roof, perform transactions through the platform and consume as needed. These P2P transactions are cheap and secure.
The blockchain ledger system enables smart contracts with checks and balances self-performed based on encryption keys when the necessary conditions are met. The private, secret key with the user and the public key used to validate the transaction must be married to complete the transactions. This makes the ledger practically unassailable.
The smart meter infrastructure can be a potential application. The introduction of smart meters in India to reduce AT & C losses and increase efficiency also increases the vulnerability of the electricity grid, which could lead to attacks by hackers.
Here, there may be the potential for a good fit between blockchain and smart metering. Blockchain has integrated security within the protocol and network, on each node without a single point of failure. Hence, private keys can be stored securely inside smart meters and will be necessary for the transmission of sensitive information.
The public key will represent the counter ID. To hack this, you will need to decrypt all the connected counters simultaneously using a huge amount of computing power that would be almost impossible.
E-mobility is another domain in which blockchain can act as a facilitator. But the scarcity of charging infrastructure is a big challenge. Exploiting smart blockchain contracts can facilitate a decentralized economic model through secure P2P transactions between private charging stations and vehicle owners.
On the transmission and distribution side, the blockchain can facilitate central monitoring and control systems to form "Virtual Power Plants" (VPP). With greater transparency and immutability, VPPs can improve network security, process efficiency and reduced delivery times for energy transactions.
Of course, while the blockchain governance model has yet to be established since technology is evolving, in the long run blockchain has the potential to change the Indian energy landscape.
The writer is Head, Energy Management, Siemens Ltd
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