It is a splendid event to observe when two new technologies combine to create a new marketplace. In recent years as new sources of distributed energy have been entering the electrical grid to provide power they are necessitating a change to the existing large-scale infrastructure model of power supply.
Figure 1. Classic electric power grid model with bulk generators transferring power long distances to reach the consumer. Image courtesy of NetGain Energy Advisors. (1)
The old model utility was large and centralized and tracking transactions was simple as consumers were on one side of the ledger, while the provider as on the other. And whereby currency and energy flowed only in opposite directions between two identified parties, consumer and provider.
In the emerging markets of small-scale independent energy providers, we can see buildings, communities and even individual residences having built capacity to provide intermittently or on demand power at times, and consume or store power from the grid at other times. Solar power is only available during the day, and will require new commercial methods of energy storage.
Figure 2. An example Microgrid (2)
In the transition from decentralized utility is the development of the Micro-grid. The Micro-grid offers many benefits to society, including; (a) use of renewable energy sources that reduce or eliminate the production of GHG’s, (b) increases in energy efficiency of energy transmission due to shortening of transmission distances and infrastructure, (c) improved municipal resilience against disaster and power reductions, and finally, (d) promotion of economic activity that improves universal standard of living.
As buildings and communities evolve they are moving toward renewable energy sources to supplement their energy requirements and reduce operating costs. Even the building codes are getting into the act, requiring buildings be constructed to new energy efficiency standards. Also, we are seeing the development of new technologies and business methods, such as solar powered charging stations for electric vehicles.
The existing electrical grid and utility model has to develop and adapt to these new technologies and means of locally generating power. The future will include the development and incorporation of peer to peer networks and alternative energy supply methods. Consumers may purchase power from multiple sources, and produce power and supply it to other users via the electrical grid.
Micro-grid and the Blockchain
As new energy sources/providers emerge there is added complexity to the network. Consumers of power can also be an energy providers, as well as having different energy sources available. This increased functionality raises the complexity of possible transactions in the network.
Imagine a financial ledger, where each user in the system is no longer constrained to be a consumer, but also a supplier to other users in the system. In order to track both the credits and debits it has been proposed that the exchange of blockchain tokens be utilized to sort out complicated energy transfer transactions in a distributed P2P network.
P2P TRADING
This class of Platform Application gives retailers the ability to empower consumers (or in an unregulated environment, the consumers themselves) to simply trade electricity with one another and receive payment in real-time from an automated and trustless reconciliation and settlement system. There are many other immediate benefits such as being able to select a clean energy source, trade with neighbors, receive more money for excess power, benefit from transparency of all your trades on a blockchain and very low-cost settlement costs all leading to lower power bills and improved returns for investments in distributed renewables. (3)
One blockchain based energy token that has caught my attention is called POWR and is currently in pre-ICO sales of the tokens by the Australian platform Power Ledger. One of the uses of the platform that is being suggested is peer to peer trading.
“We are absolutely thrilled with the results of the public presale,” says Dr Jemma Green, co-founder and chair of Power Ledger. “Selling out in just over 3 days is a very strong performance in line with global ICO standards, which speaks to the strong levels of interest from consumer and institutional buyers.”
The proceeds from the total pre sale were AU$17 million and the main sale on Friday offers approximately 150 million POWR tokens (subject to final confirmation before the sale opens) in an uncapped sale, meaning that the level of market demand will have set the final token price at the end of the sale. (4)
References
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