In this article we explore the possibilities on how blockchain can help improve the power grid. To begin with, we must first understand the technology. Blockchain is a way to record and verify transactions without the need of a central entity to maintain or confirm the ledger. The blockchain technology is infamous for its peer-to-peer network of transactions for bitcoin and other cryptocurrencies.
In the past, blockchain technology was being utilized for trading bitcoin. The trading was conducted via a network of distributed computers that would verify and record transactions. Now the blockchain is being looked into for other sectors. For example, blockchain is being taken into consideration for the utilization to cope with complex electric power systems.
In 2017, there’s been some start-up companies that have applied the blockchain technology to the energy sector. The goal of these startups is to trade electricity or even create new ones. Using blockchain will enable peer-to-peer transactions which can bypass a central utility or their energy provider. Another optimistic goal is to use the technology to track production of clean energy. Other proposals have included, making it easier to pay for charging electric vehicles, raise funds to deploy clean energy, manage customer appliances, and others. The exciting part of peer-to-peer transactions is the ability to trade electricity with one another. Essentially, a neighborhood would be able to trade excess energy with one another.
In regard to the grid transactions, there’s a range of other electricity trading applications available that are less essential than a truly decentralized peer-to-peer network. These options are more likely to gain commercial traction and support from utilities and regulatory authorities, because of the capability of utilizing the current electric power system in place.
One of the advantages of blockchain technology for the electric power, is the ability to record and sustain trade attribution. An example would be, renewable electricity and how much emissions would result from its production. Currently, systems are centrally managed, complicated, and prone to errors. However, the benefit of a decentralized blockchain network would provide transparency, accuracy, tracking, and trading. In addition, this would accelerate a clean energy deployment and carbon emissions reduction.
The blockchain networks could also enable private home owners to setup a charging infrastructure and seamlessly sell charging services to electric vehicle owners. Any way you cut it, blockchain offers incredible potential when it comes to enhancing the power grid.