Expanding the Possibilities of Electrification with Blockchain
Public perception of cryptocurrencies, such as bitcoin, runs the gamut from valuable disruptor to volatile fad. But no matter your opinion of digital currencies, one emerging technology underlies them: blockchain.
Also known as distributed ledger technology (DLT), blockchain records transparent, digitally signed, authentic and, theoretically, tamper-resistant information. By executing algorithms to evaluate and verify exchanges and determine the validity of entries, or blocks of data, blockchain proports to create trust among participants and integrity of transactions — without the need for a central authority such as a bank.
Though still a relatively new and evolving technology, the two transactional benefits of blockchain — eliminating intermediaries and preventing alterations, deletions or reversals — could prove transformative for how electric utilities conduct business in a future that incorporates electrification technologies from residential through microgrid implementations.
Utility Applications for Blockchain
Blockchain technology is broader than cryptocurrency and has possible applications wherever visible and traceable transactions are required, specifically delivering in three areas:
- Transactive energy — From solar power to customer-owned microgrids and on-site energy storage, a new transactive energy model is being conceived to compensate electricity services in real time. Blockchain can optimize this model by allowing fast and secure energy transactions on the grid, facilitating a balanced electricity flow.
- Supply chains — Whether for bills of lading, compliance certificates or purchase orders, supply chain management is a primarily paper-based world. Blockchain can improve efficiency, productivity and security with smart contracts that execute automatically when certain conditions are fulfilled, such as delivery of goods or services.
- Vehicles — As the charging station infrastructure for electric vehicles (EVs) grows in the consumer market, blockchain and peer-to-peer networks could potentially commercialize private, residential chargers. Blockchain transactions provide income possibilities for residents and utilities to charge, and pay for, electricity from idle residential charging poles.
Taking Steps Toward Blockchain
The potential is strong for blockchain to modernize the utility industry’s ability to provide clean, safe and reliable power. Although the future of this technology is yet unwritten, forward-thinking utilities can begin developing plans to pilot concepts at low cost and low risk. Insight can even be garnered from other utilities and industries that are already responding to impacts from blockchain.
Blockchain technology is a natural evolution of our ever-growing digital world. And though it may be tempting to put off considering it until you believe the technology directly affects your utility, pilot applications are in fact already out there.