Blockchain is one such technological advancement that will have extensive consequences and won’t just transform financial services but other industries as well. Keeping that in mind a system that keeps a track on the amount of clean energy produced has been designed and created by governments all over the world.
According to Jesse Morris an energy expert from Rocky Mountain Institute, a new system based on blockchain which is the technology right at the heart of bitcoin would work. Morris says blockchain could solve data management challenges in the electricity vertical by keeping track of renewable energy which is one of its many capable applications. It’s not just him though; there are many others along with him who believe that this technology could help revamp the framework of the grid itself.
A blockchain is basically a shared ledger of records that are arranged in data batches known as blocks that utilize cryptographic validation which connects them together and is maintained by a network of computers. If what advocates is true then this technology could be promising in industries where networks of peers depend on shared sets of data, for instance electricity producers and consumers connected by the grid.
The electricity vertical for the most part is still based on massive, centralized power plants that generate power sent long distances over transmission and distribution lines. Although, in the past few years, an increasing number of smaller distributed power generators and storage systems, have been connecting to the grid.
Jemma Green, cofounder and chair of Power Ledger says, the owners of these systems struggle to maximize their value because the system is so inefficient. For instance, normally it takes an average of 60 to 80 days for an electricity producer to get paid. With a blockchain-based system, Green says that producers would get paid immediately; as a result less capital is needed to start and run a generating business. In a system like this, neighbors can easily trade energy with each other, making it a far more efficient process when compared to selling electrons back to the grid first. Power Ledger has demonstrated a product that can turn an apartment building into a microgrid based on a shared system of solar panels and battery storage, for example.
With a dozen energy experts convinced that blockchain technology has the capabilities to spark a fundamental transformation of modern energy grids, that’s just the beginning.