Blockchain – What is it, and what does it do for renewables?
27 September 2018
Blockchain, developed to enable trading in such cryptocurrencies, is a familiar buzzword in financial markets. However, its application is finding many more fields than simply digital currency, including energy markets and the renewables sector.
Blockchain is defined as a persistent and transparent public append only ledger. A chain is formed of a series of transactions, with each transaction recorded by adding a block to the chain, thus providing assured traceability, and then secured using cryptography. Many opportunities have been identified for using blockchain within the energy sector and many more remain untapped. There has been an explosion of companies created to exploit the technology and major utility players are also developing applications.
In parallel with the growth of renewable energy, the electricity industry has been grappling with the shift from centralised to decentralised generation and distributed energy sources. This requires a new view on how the electricity network is operated and changes in roles of the incumbents.
As consumers have begun to own generation assets (typically rooftop solar photovoltaics), storage (in electric vehicles) and smart home technology, they desire more control over their electricity use and administration. Small-scale trials of peer-to-peer trading have also begun.
At the same time, power grid owners and operators must maintain the networks, keep them safe, and ensure the overall system remains stable and secure with sufficient generation capacity. The price signal to ensure generation is appropriately located near demand must remain.
Blockchain is the key that could unlock the present disconnect between these two interest groups and sets of objectives. How exactly this is going to be implemented is up to market players and regulators and could herald the most interesting period within the electricity industry since its inception.
RCG recently presented a paper at The Global Wind Summit in Hamburg, an event combining the global conference of WindEurope.
Elaine Greig from RCG presented “Blockchain – What is it, and what does it do for renewables?”, by Elaine Greig and Max Langtry, in the following session: “System Integration & Digitalisation”, Thursday, 27 September 2018.