LawrenceOrsini, founder of LO3 Energy, the first-ever blockchain application project in energy, said, “Bitcoin has changed finance to a large extent, but blockchain applications in the energy sector may play a bigger role.”
“EnergyBlockchain”, an innovative application of blockchain technology in the energy sector, allows the energy system to be fully decentralized, providing infrastructure for complex networks in payments, sales, transactions and value distribution, especially in the power network. Blockchain technology has shown strong application potential. In addition to performing energy supply transactions,blockchain technology can also provide the basis for metering, billing and settlement processes. In recent years, technology investments in the energy blockchain have also been very active.
Energy Blockchain has three major advantages:
1. Simplification of multi-layer systems
Energy supply contracts can be transferred directly between producers and consumers,while multi-layer structures such as intermediate power producers, distribution system operators, transmission system operators and suppliers can be skipped by information sharing through blockchain.
USenergy blockchain company, LO3 Energy, has formed a joint venture with Siemens Digital Grid and blockchain operator ConsenSys to establish a blockchain-based micro grid project to achieve peer-to-peer power trading between community residents. If a household has excess electricity, it can access smart meter sand sell excess power to community neighbors. Due to the automation nature of blockchain, almost no management personnel are involved in this entire process.
2. Automatic control of energy network
Smart contracts can automatically send information to the system, formulate trading rules, ensure automatic control of energy and storage flow. They can also greatly enhance supply and demand flexibility of the energy network, and effectively achieve supply and demand balance without complex manual operations.
Electron,a company based in UK, uses blockchain technology to provide flexible adjustments to power supply of the grid. This enables real-time transactions,allows consumers to adjust energy consumption habits in the form of transaction compensation and suppliers can respond to real-time price signals.
3. Safely record energy flow
Blockchain can safely and permanently store all energy transaction data, prevent tampering and losses, and realize data precision and visualization. In addition, blockchain can automatically complete the issuance and trading of renewable energy certificates (REC certificates) based on actual power generation. Real-time recording also makes real-time monitoring possible. Once a match is detected,equipment maintenance and related expense payments can be followed up with immediately.
IdeoCoLab, a leading design consultancy globally, has integrated its functions with Nasdaq’s LINQ platform and Filament’s hardware, and use blockchain to realize power generation based renewable energy certificates (REC certificates). This allows small power generation organizations to access easy tracking,certification and trading of electricity.
The emergence of energy blockchain has many potential implications for the future of the energy industry. For example, the industry’s entry barriers will be reduced, and the sale of over-produced electricity will be easier. For small power producers, blockchain would enable easy data recording, tracking, and trading functions. The functions of incumbent trading institutions and trading notaries may shrink.