Blockchain and How It Could Help with Microgrid Transactions
The Blockchain has allowed cryptocurrencies such as Bitcoin to flourish without the need for banks or governments. Ensuring of instant payment on delivery of goods and services agreed to in immutable smart contracts. However, the technology is developing beyond the digital currency phase. The evolution of the energy market is one of the most exciting to date.
The world’s energy demand is forecast to increase over the next decade, the introduction of electric vehicles (EVs) adds additional constraints, however, also help balance the grid through vehicle-to-grid (V2G) charging.
Traditional utilities are no longer the sole providers of energy, the increase in renewable technologies such as solar and battery storage incentivize the development of microgrids. While start-ups are working alongside Blockchain to create new business models that utilize surplus energy generation.
What is Blockchain?
The Blockchain is a method of recording data – a distributed digital ledger of transactions, agreements, contracts – anything that needs to be independently recorded and verified. The ledger maintains an audit trail of permanent records, called ‘blocks.’
By design, Blockchain technology is decentralized. Decentralization means the network operates on a peer-to-peer basis. By creating a new way of verifying transactions, traditional methods could become obsolete.
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A more complex grid
World energy demand is set to increase by 28% by 2040, with the majority of the growth occurring outside the OECD countries, namely China and India.
The introduction of electric vehicles (EV) could add 18GW to peak demand by 2050. Furthermore, EV Charging from the same transformer known as clustered charging can result in outages and added costs. On the other hand, V2G charging transforms an EV into a power source. Excess battery capacity can be used to avoid peak electricity tariffs. Electric Nation in the UK is already trialling this concept to help balance local electricity networks.
Solar power was the fastest-growing source of new energy worldwide last year, according to the International Energy Agency. Consumers, corporations, and start-ups are investing in solar and battery storage, facilitating the path toward decentralization.
Deployment of solar incentivizes the formation of microgrids. A connected energy system that allows you to power your home or business with solar, offsetting peak periods of usage, while still being connected to the grid. Any surplus energy generation with the power of Blockchain becomes a secure tradable asset.
Power Ledger is in the process of developing a platform where the consumer can trade electricity with one another and receive payment in real-time from an automated and trustless reconciliation and settlement system. Similarly, deX, backed by the Australian Government, is in the initial stages of rolling out the deX exchange in the Mornington Peninsula. The initiative aims to support households and businesses in taking up renewable technologies and help reduce peak demand over summer.
Localised microgrids empower consumers to generate, consume and trade self-generated energy. It seeks to optimise value for all parties and allow centralized grids to integrate renewables and manage the reliability and stability. This is key to creating value for energy customers in the grid of the future.
Extensions of Blockchain
Smart Assets – In the context of peer-to-peer systems, “smart assets” are unique virtual tokens of ownership that can be controlled or exchanged using smart contracts. The smart asset can be a virtual representation of ownership, such as a house or car. Speaking of cars, Decentralised Autonomous Vehicles (DAV) have set their sights on allowing autonomous vehicle owners to exchange their vehicles in a decentralized marketplace using the digital currency DAV.
Distributed Cloud Storage – Current cloud services are centralized. Thus, you place trust in a single storage provider. With Blockchain this can become decentralized. Storj is testing their encrypted cloud storage platform, with improved security and decreased dependence. Also, users can trade excess storage capacity in a new marketplace.
Digital Voting – By casting votes as transactions, Blockchain creates a record for each vote. This way, everyone can agree on the final count because they can count the ballots themselves, and because of the Blockchain audit trail, they can verify that no votes were changed or removed, and no illegal votes were added. To improve voting across the United States, The Free and Equal Elections Foundation is working tightly together with Blockchain voting company, Follow My Vote.
Today, we still rely heavily on centralized intermediaries to establish trust and coordinate capacity. This creates an opportunity for Blockchain to revolution the way we think.
In the next decade, hundreds of devices will come online and be integrated into our daily lives, doing everything from monitoring our health and managing our affairs to generating power and selling it. Banks won’t be used to purchase solar energy; devices will. These devices need a way to transmit sensitive data securely to peers; Blockchain will more than likely be the answer.