This article discusses the integration of blockchain technology and energy for solving the existing energy problems by presenting examples of its adoption around the world for the betterment of global energy sector.
This article discusses the integration of blockchain technology and energy for solving the existing energy problems by presenting examples of its adoption around the world for the betterment of the global energy sector.
The decentralization concept of Blockchain technology has been explored, researched and adopted in solving the prevailing issues in different areas throughout the world. The energy sector, being one of the major contributors to the global economy can’t ignore the possibilities offered by this emerging technology. Different tech companies, governments, firms have collaborated to explore blockchain based solutions to solve the existing energy issues. However, a quick look into the overview of energy problems and its management issues is important before understanding how blockchain powered applications act as solutions.
The consumption of our sources of energy has tremendously increased since the industrial revolution of the 19th century. Before that, for over a century there was rapid exploitation of non-renewable sources of energy such as fossil fuel, coal or petroleum. The industrial revolution brought the concept of sustainable, clean and reusable sources of energy. Even though the global energy sector is rapidly moving ahead, it is still under the control of a centralized system. It's high time for the global community to step ahead and solve energy issues by capitalizing modern technologies.
The energy travels through the complicated distribution of networks before reaching the home network whereby it suffers through multiple leakage or wastage. According to a study, 8-15 % of energy is lost before reaching its final destination. This power leak not only wastes our money in the bill but also emits harmful chemicals in the atmosphere. Similarly, over voltage might occur if a large number of people use solar power than expected which causes equipment damage, leading to the reliability issues as well as the safety concerns.
Further, the number of energy-consuming products is exponentially rising: the use of vehicles, computers, air conditioners, smartphones, servers, household applications has increased. The search for an alternative to non-renewable energy resources has also become a global concern.
On top, the energy sector is owned by a centralized system and the related business issues are seriously rising. Lack of information on the exact amount of energy production rate as well the consumption rate has led to the corruption of energy. The middlemen are undoubtedly making plenty of profit while they are at it. The unfair and inefficient system has cost a lot to the consumers as well as the environment. Blockchain technology by virtue of its nature is being explored in different parts of the world to address these issues faced by the energy sector.
The main advantage of Blockchain technology is its ability to measure, store and certify the data without the need of an external service provider reducing the cost and complexity of the transactions.
We have discussed the possible applications of blockchain below to better understand what’s happening around the world to transform the energy sector through innovation.
The hassles associated with energy transactions could be easily and efficiently handled by Blockchain technology. It abolishes the need for a central controlling body like an energy service company and eventually guarantees its reliability. All the transactions are recorded and stored from which all the participants are informed at a real-time preventing the possible fraud. The newly created transactions are linked with the previous ones, which makes a secure and resilient network of transactions. Similarly, every user can check for themselves regarding the valid transactions which provide transparency, trustable and tamper-proof records.
The digital ledger can be used as a database that permits multiple users to make changes and simultaneously results in multiple chain versions. This makes it possible to monitor, record and store all the energy flow and transactions in a distributed and a secured way. The energy use of all the users at a certain point could easily be documented. In case of any disputes, the record created within the blockchain technology will support from both legal and judicial point of view as Blockchain allows the automated execution of smart contracts in the peer-to-peer network.
The leakage of CO2 can be reduced using the blockchain platform that automatically enables these activities through a smart contract system in a secure and transparent way. One of the possible solutions to control the leakage is by the use of the carbon credits. A carbon credit is a tradable permit or certificate that permits the credit holder to emit one ton of carbon dioxide or any other equivalent greenhouse gas. The token protocol capable of automatically calculating the carbon credits would help in transforming renewable energy. Further, such energy could be traded easily in the market as well as monetized.
The proper energy utilization and record of the power leakage can be properly stored in blockchain, an encrypted ledger of networks which could be a great tool for further use.
Actually, all these records could be used for the better implementation of green and renewable world.
The popularity of electric vehicles is rising, yet customer adoption is still facing a lot of barriers including the scarcity and complexity of the public charging infrastructures. Blockchain networks have the capability to enable greater adaptation of EVs by enabling the private owners to get reliable charging services with proper streamlines for reducing the charging costs. The use of Smart Contracts can enable EVs to charge or discharge according to their requirement of the electric grid that allows them to act as a mobile battery and stabilize the grid.
Blockchain could also be used in the energy sector to facilitate the trading of electricity.
The existing electric power system could use blockchain in two different ways, one of the ways is to improve the existing electric power system and another is to redesign the system.
The traditional method of distribution of the electricity supply exists as a centralized system with the authority of major energy and utility companies. It consists of large power stations where energy is produced through the main grid. This energy is distributed to consumers through a wide transmission network.
A grid is an interconnection of a network that delivers electricity from the producers to consumers. Although the electric grids are widespread, 1.4 billion people are still far from the connection of the electricity grid, according to the Swedish Institute of the International Affairs.
Blockchain offers a possible alternate solution by reducing the dependency on buying from these grids. This helps in reforming the existing wholesale electricity markets by helping to validate the transaction more easily at a cheap price. The application of the grid will probably ultimately be more meaningful to the future of the electric power sector and its ever-increasing complexity.
Blockchain is a reliable medium that could be used for enabling the peer-to-peer transfer of information without the central authority. This revolutionary technology could be used to conduct virtual energy transactions allowing the trade of energy generated by the distributed batteries or solar panel by any individual, homes or business.
The failure of authorities has made people rethink about the alternate solutions to meet the increasing requirements and solar energy could be the best alternative. Any leftover energy/ electricity produced by the solar could be sold back to the grid. However, the presence of middleman and other issues might be an obstacle to pay the exact amount that should be paid. With the help of P2P Energy, the leftovers can be easily sold as per the user’s wish.
The enormous capabilities of Blockchain technology in energy sectors are explored and adopted at a rapid rate. There are different startups, research communities, programs in different parts of the world embracing blockchain technology as a part of solving the prevalent issues in the energy sector. Let’s have a look at some of the ongoing energy-related projects in different parts of the world:
Project Based on: The United States of America
Description of project:
Brooklyn Microgrid project is one of the first energy-related projects. It was initially initiated by a New York-based startup LO3 energy.
This project allows people to power their own homes through a range of local renewable energy sources. The people can also sell unused electricity to their neighbors. It also ensures the accurate record of transactions, a decentralized accounting, and metering providing shared transparent data and information to the users.
The company has developed a solution called Exergy which is a permissioned data platform that creates the localize the energy marketplace for the transaction of energy across the existing infrastructure. Exergy helps the prosumers to generate energy through their own renewable source in their local marketplace. The energy generated is stored, transacted locally through the microgrid ecosystem.
Project-based on: England
Description of project:
Electron is a startup company that is harnessing the blockchain technologies design a more efficient and flexible system for the energy sector.
It provides a peer-to-peer trading platform for the producers and consumers to trade excessive energy efficiently. It is a meter registration platform for gas and electricity supply that facilitates faster switching and data securitization. It supports the industry’s transition to the smart grid infrastructure.
The company aims to capitalize on the opportunities presented by the changes in the energy market by creating innovative, collaborative solutions based on the blockchain guarantees providing the lowest cost benefit.
Project-based on: Switzerland
Description of project:
Power-id is a pilot project led by ETH Zurich and financed by the Swiss Federal Energy Agency whose feasibility is being tested in the village of Walenstadt among 5000 inhabitants.
The main objective of this company is to create a small peer-to-peer energy marketplace of 40 prosumers and consumers. It focuses on solar energy and batteries for storage.
Project name: United Kingdom
Share&Charge is a product from MotionWerk currently deploying as a pilot in Uk. It runs in collaboration with several partners like Volkswagen or Electric Blue.
The main objective of this company is to solve the existing anxiety caused by unavailability of charging stations of the Electric vehicle in spite of the rise of electric Vehicle in the world. Different initiatives have been launched to create a trading platform that allows people to charge at any station, private or public. It aims to overcome interoperability issues occurred through multiple chargers and the payment forms.
Project Based on: Germany
Tal. Markt is a platform initiated by Wuppertal Stadtwerke Energie & Wasser AG (WSW) in collaboration with the Swiss company Elbox.
Its main objective is to operate a local and regional marketplace for the renewable energy that was produced in the Wuppertal area. It targets to connect all the citizens and local renewable energy producers with a wind turbine to meet their increasing demand.
Project-based on: Germany
It is a project initiated by Stadtwerke Energieverbund (SEV) by grouping eight Stadtwerke.
The project aims to offer service to encourage customers in order to increase the use of renewable sources of energy. It provides a smart meter to the customer willing to take the service and helps in the measurement and storage of the share of electricity in real time. The customers with the highest renewable share are rewarded with Grünstromjeton tokens.
Project-based on: Spain
Project Description: Pylon Network Project is a startup based on Europe which uses the Ethereum platform. It has its own token namely Pylon coin which is developed by FairCoop.
This network aims to educate all the energy sellers about the adequate knowledge of energy flows. The product developed by them targets the renewable energy cooperatives which combine with a smart meter( Metron) and blockchain technology to certify the energy flow enabling virtual transaction using tokens.
Project Name: Belgium
Project description: NRGcoin is a concept developed by researchers at Vrije Universiteit Brussel (VUB) as a part of the European project Scanergy in partnership with Sensing & Control Systems.
The main objective of the company is to encourage citizens to use the local renewable energy as a compensation for inadequate renewable energy.
It aims to increase the renewable energy installations leading to less expensive locally-produced energy. Within this network, for every use of renewable energy, the customer is rewarded with a cryptocurrency known as NRGcoin.
Project-based on: Australia
Project description: Powerledger is an Australian startup that has an innovative solution for trade energy trading.
The project aims to balance the energy supply and demand efficiently through utilities. It integrates blockchain and big data in a distributed energy system to avoid dumping of the extra solar energy generated back into the grid. The leftover energy is provided to the neighbors according to their requirement.
The scope of blockchain in different energy-related projects around the world is gradually widening. Since most of the energy-related projects are on the pilot phase or experimentation stage they are yet to be implemented on a large scale. Moving ahead, the innovation brought by blockchain will definitely overcome the challenges to save energy costs and prevent leakages by helping in the generation, distribution, and consumption of sustainable energy. With the consideration of plenty of ongoing Blockchain-based projects in different countries, it can be concluded that the global energy sector would only benefit from the integration of this groundbreaking technology.