Blockchain helps in tracking, securing and exchanges resources, apart from backing cryptocurrencies the technology can be used to change a lot of industries. Blockchain technology in art, business, agriculture, the list goes on. Now you can get a glimpse of what Blockchain technology can do to the energy sector, in particular, electrical energy usage and payments.
Electrical energy, without it we all will be going back in time to the Stone Age. Starting from appliances at home to industries that make life easy, everything runs on electricity. But the distribution of electrical energy from the point of generation is an outdated lazy process.
The bill received by the user form the electrical companies can be confusing at times. Every month separate time should be allocated for deciphering the bill sent by the company. There are no clear breakdowns of how much energy was used, if it is there then it happens rarely. The present system can get even more complex if we want to compare prices between different energy providers because of this consumers stick with the single energy provider. Also if you need to locate a renewable energy provider then the chances of you finding one certified provider are like searching needle in the haystack.
Include energy in Blockchain
Blockchain technology is implemented in the energy sector can solve a lot problem faced in the present model. The initial step would be tracking energy production and consumption, data regarding production and distribution will be entered in the public ledger so that all the transactions happening in the system are transparent.
A power generating station can update the amount of energy they have produced from the last generating point and also the generation can be divided among the consumers. This will make things simpler; the unused energy produced from the power plant can also be calculated with the help of Blockchain.
if implemented, Blockchain can have the capability to change the marketplace of energy sector into a win-win situation for both the producers and consumers. The overall demand of consumers can be met and thus there won’t be any strain or pressure on the generating stations. Malfunctioning of the system due to overload can come to an end.
Marketplace on Blockchain will also increase healthy competitions. Certain areas are dominated by a particular energy company and the production cost of renewable energy decreases small-scale energy providers can enter the market. An individual can set up a solar panel in the roof and sell the energy to neighbours on Blockchain that is how Blockchain can change the system for small-scale industries.
People are becoming socially responsible these days and are inclined towards using renewable energy resources, but once the electron enters the supply it is impossible for anyone to distinguish the source of the energy. Therefore Renewable Energy Certification (REC) has created a system to solve the problem, but it can get really confusing at times when using the system. The process is long and it can take anywhere from 6 to 8 weeks for obtaining REC’s certification for selling that renewable energy. This can also be a reason for more people opting non- renewable energy for generation. With blockchain technology, the problem of obtaining certification can be solved instantly. All the renewable energy sources will be connected with an energy meter that can update generated power details directly to Blockchain grid, every entry made by the meter will be tagged as renewable energy and can be sold easily to consumers. This system can put an end to all the scams and frauds happening in the renewable energy market.
Smart contracts for Managing Grid
An added benefit of Blockchain technology is Smart contracts; it can be a vital tool in managing the total grid. The moment energy production and consumption enters a decentralized grid the consumers can pay the energy producers in real time. Smart contracts can coordinate the payments and each kilowatt generated and sold will get paid at the same instant. The revenue of all the utility companies will be consistent as the energy produced is getting paid at the instant. Consumers also get the leverage of choosing a better provider who is offering a reduced price deal in the market. Every month bill can be replaced by payments depending upon usage, like a service, pay as you use.
With all this said, the implementation of Blockchain technology into the energy sector is not a simple process, it can take time but the benefits and improvement cannot be compared. Dynamic pricing and improved competition will be a huge advantage from the consumer point of view. For a fact, the energy grid will become more complex in the future and for sure Blockchain will play an important role.