BLOCKCHAIN FOR RENEWABLE ENERGY MARKETS: USE CASES

Current electricity industries are moving towards a more decarbonised, digitalised, and decentralised structure. This is where blockchain technology can be used to ensure greater automation and better management of data with higher security at lower costs. These qualities ensure blockchain technology’s crucial role in the energy grids of the future. Although the concept of blockchain technology is still in its infancy in India, real-world projects are already underway in many other countries. The use of blockchain technology for energy trading, grid optimisation, e-mobility, and the management of Certification of Origin are some of the key areas of focus in these countries. This article aims to discuss these areas in detail and provide examples of initiatives and projects that are already underway.

Energy Trading

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This is one of the best use cases of blockchain technology. Energy trading applications are currently being developed to target wholesale, retail, and local peer-to-peer (P2P) electricity trading systems. Germany-based Ponton’s Enerchain allows energy trading companies to anonymously send, receive, and execute orders via a decentralised order book. As of 2018, Enerchain comprised of 43 European firms and now has plans to expand to more countries. In the retail electricity markets, blockchain offers to decrease the variable costs of retail processes and in the case of wholesale energy markets, blockchain can eliminate the need for intermediaries. 

The US-based company, Grid+, has developed a blockchain platform that gives consumers direct access to wholesale electricity markets. Grid+ acts as an energy retail supplier through its Smart Energy Agent, a device that makes smart decisions for energy trading on behalf of consumers. 

Similarly, several companies in other parts of the world have launched solutions wherein consumers can directly purchase energy services from energy generators or suppliers. An example of this is a Singapore-based company, Solar Bankers, that has developed a P2P energy trading platform that allows small solar generators to sell their electricity to local energy markets. Another company called TerraGreen, based in Malaysia is focusing on biomass projects by linking end-users directly to biomass power producers.

Apart from selling energy, some companies specialise in other aspects of energy trading as well. One such company is the Australian-based company, Power Ledger, that tracks the generation and consumption of all trading participants and settles energy trades on predetermined terms in near-real-time. 

Grid Management and Operations

Grid management is another aspect that can be better controlled using blockchain. It can be used to balance supply with demand, improve visibility of distributed resources and assets, and achieve a better level of coordination between the operations of transmission and distribution systems. 

The Dutch-German Transmission System Operator (TSO) TenneT is the first power grid operator to try out blockchain technology for grid balancing. Elia, Belgium’s electricity TSO is also studying the use of blockchain technology for the automation of several processes to increase the flexibility of the grid.

Certification of Origin Management

Currently, renewable markets depend on certificates of origin, including Renewable Energy Certificates (RECs), Guarantees of Origin (GOs), and International RECs (I-RECs), to provide origin details of each MWh of renewable energy generated. Blockchain can automate these green certificates, eliminating the need for a central verification or audit agency which, in turn, helps reduce transaction costs and increase transparency.

The Energy Web Foundation (EWF) in Switzerland is developing EW Origin, an open-source blockchain-based toolkit for Certificate of Origin trading and tracking. Similarly, US-based Volt Markets is developing a platform that issues, tracks, and trades RECs. Another US-based company called The SolarCoin Foundation rewards solar energy producers with blockchain-based digital tokens at a rate of 1 SolarCoin per MWh of solar energy produced. These can be used for energy trading and will allow solar installation owners to possess a free additional reward independent of other incentives.

The Way Forward

For all its positive qualities, blockchain also has its fair share of criticism. Critics believe that there is a serious risk that more than one blockchain initiative will track the same MWh of electricity from renewable sources. Rightly so, as this will cause chaos in the sector once the use of blockchain technology becomes widespread. Blockchain enthusiasts will now have to come up with solutions that are less disruptive and more in sync with existing regulations to confidently put their critics to bed.


Click here to read our article on Blockchain for Renewable Energy Markets in India in case you’ve missed it.

Summarized from RenewableWatch

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