How DLT Can Reshape The Power Redistribution
TechnologyBit News Today2 min read
Blockchain enables direct energy trading between homeowners or small businesses, where traditional utilities are partially displaced or no longer needed.
Blockchain Takes Off in the Energy Sector
In 2016, the US company connected five prosumer homes (in this case, homes that were fitted with solar PV installations) to five consumer households, enabling the latter to buy excess power from the former. The homes were connected to a microgrid, so power was not transferred via a utility-owned grid.
However, experts note that while blockchain can facilitate payments for electricity between peers, electricity must still be physically transferred along distribution networks. The technology is thus not a full replacement for power grids, but rather a complement that could improve market efficiency and give consumers more options. Importantly, regulations will need to be updated for peer-to-peer power transactions.
The Australian-born Power Ledger provides a glimpse into blockchain's future in the U.S. energy sector. In May 2018, it partnered with the Clean Energy Blockchain Network, launching its first commercial deployment in the US at the Northwestern University Evanston campus. The commercial, utility-grade deployment will initially run across four buildings curated by Northwestern University’s Master of Engineering Management Program with plans for implementation to kick off in the coming months.
Benefits and Barriers to Energy Blockchain
As more blockchain initiatives begin to move from pilot to production, the National Renewable Energy Laboratory (NREL) and Pacific Northwest National Laboratory (PNNL) have identified the transformative potential of this technology, as well as critical obstacles to its adoption.
NREL notes blockchain provides a compelling pathway to energy market evolution, including challenges such as simultaneous exchange of currency and energy commodities, ensuring customer privacy, and incorporating transmission/distribution losses. The lab established peer-to-peer energy transactions between two test homes at the National Renewable Energy Laboratory, employing Dash for transaction settlement.
For PNNL, enhancing security in the energy supply chain is a key motivation for leveraging blockchain technology. Grid modernization has increased the use of “smart” energy devices that network, digitize, automate and increasingly converge the cyber-physical energy supply chain. To facilitate NERC CIP compliance, PNNL explores how a cryptographically signed distributed ledger provides increased data provenance, attribution and auditability.
What's Next?
Though blockchain for energy remains an emerging field with significant regulatory, technical, and economic barriers to surmount, striking early successes and ambitious projects signal rapid evolution ahead. As we have seen, companies, research institutions, and even major universities now count themselves among blockchain energy pioneers.
Without doubt, blockchain technology could be a key part of the electricity markets of the future, influencing everything from smart contracts to innovative microgrids. Experts will be watching closely as new projects aim to prove out the concept. Drawing insights from their failures as well as successes will be critical to accelerating development, encouraging industry adaptability, and ensuring blockchain's potential is fully realized in the energy sector.
