Blockchain Enables Successful P2P Energy Exchange
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- Jul 14, 2019 4:53 am GMT
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New models of power distribution require new ways to manage them. In particular, as distributed energy resources (DERs) such as rooftop solar become more prevalent, customers may want a way to exchange excess energy between themselves that entirely bypasses their local utility. Because of its ability to log a series of complex transactions in real time, blockchain technology could be a key to success for this peer-to-peer (P2P) model.
How Blockchain Works with P2P
A blockchain platform serves as an electronic ledger that enables users to record transactions in an unchangeable, transparent environment. The platform includes multiple layers of security, promoting trust in the technology to maintain “one version of the truth” even among participants who don’t know or necessarily trust each other.
For example, say 20 households in the Sunny Skies neighborhood want to trade excess solar energy based on the P2P model. Each participant at any given time may buy from or sell to any other participant. Rather than trusting a central entity, such as a utility, to keep track of these transactions, they can be recorded in a blockchain-based database, which requires consensus among all users to validate its actions.
At this point, the pairing of P2P and blockchain is still in the experimental stages. As more utilities put the system to use on larger scales, obstacles can be noted and overcome. But, based on some initial projects, the idea holds a lot of promise.
For example, according to Blockchain News, “Australian [energy] trading company Power Ledger has partnered with a subsidiary of one of Austria’s top five largest energy utilities under Energie Steiermark, to deploy a [P2P] energy trading network in and around Graz.” The platform will initially be available to “10 Graz households, enabling those with rooftop solar panels to sell excess renewable energy to their neighbors.”
Power Ledger is also involved in a project in Japan in conjunction with Sharing Energy, a leading provider of solar energy. “Sharing will use Power Ledger’s [P2P] platform to facilitate electricity trading between sellers and buyers using real-time data from existing smart meters.”
LO3 Energy, based in the U.S., provides P2P microgrid ecosystems “to allow households, businesses, schools and other organisations to buy, sell and share energy locally,” according to Australia-based The Fifth Estate. The platform is “cloud-based and leverages a form of private permission ‘proof of authority’ blockchain…. Customers use [an] app to place bids specifying the amount they are willing to pay for the energy made available by prosumers…and local energy producers.”
Notably, LO3 started one of the earliest P2P projects in Brooklyn, known as The Brooklyn Microgrid (BMG), which “promotes decentralization because no longer are members relying on a centralized figure, the public utility, for buying and selling energy.” Rather, “members can directly transact with fellow members in buying and selling renewable energy.”
What’s Next for Blockchain and P2P
Blockchain can add value to P2P in other ways as well. For example, according to Digitalist, “Blockchain offers opportunities to coordinate EV charging. Blockchain can orchestrate the charging station network autonomously, showing drivers where nearby stations are located and how they are being used.” Additionally, blockchain can be used to manage energy use by managing household batteries to “prevent congestion on the high-voltage grid and keep it in balance.” Finally, “Blockchain can reduce costs for public agencies administering [renewable energy certificates, or RECs] by streamlining trade verification and data indexing.”
Clearly, both the P2P model and the blockchain platforms that may support it have great potential for furthering the evolution of power distribution. Time will tell how these innovations shape energy’s future.
What do you know about P2P and blockchain? Please share in the comments.