While the utility industry is in the quest to enable transparent transactions, blockchain is sure to serve as a solution.
FREMONT, CA: Smart Grid systems leverage different technologies to provide optimized services to network users. While a smart grid is intended to ensure efficient distribution of the electricity, the concept also adds complexity to the system. For instance, it may be ambiguous for the various stakeholders to understand how a transaction between energy generators and consumers are accomplished. This ambiguity can be resolved with the introduction of blockchain, which will enable transactions to be performed with smart contracts, while the network will act as a transaction verifier. Further, blockchain will also offer immutability to the transactions as well as transaction history.
There are numerous trends that will emerge with the incorporation of blockchain in the grid networks. There will be a shift from a future market to a spot market. While the consumers buy electricity for the future to minimize the risk of price increase in a futures market, consumers will buy electricity for immediate usage in a spot market. Such a shift will be driven by the low cost of renewable energy availability. End users will not be afraid of price rises and will benefit from cheaper electricity.
Increasingly, users are expecting payment as per their usage needs. The incorporation of blockchain in the grids will enable the users to pay exactly as per their needs. For instance, users would be able to pay for as little as 0.1 MW of electricity usage. Such small transactions will aptly complement the intermittent power generation from renewable sources. Moreover, blockchain will perform better traditional energy exchanges in such scenarios as blockchain will result in lower service charges.
Utility firms are increasingly eyeing blockchain as a means of enhancing the efficiency of their grid and grid-based transactions.