Blockchain’s potential in bringing efficiency and reliability into the value chains of various industries, power sector being one of them, is still evolving.
A World Economic Survey suggests that 10 per cent of the world’s GDP could be stored on blockchain by 2027. Large investments into blockchain are underway.
The evolution towards a smarter grid is the most comprehensive and disruptive development to confront the energy industry since mass electricity distribution was first introduced more than a century ago.
To achieve the government’s ambitious targets for renewables, there is need for grid integration solutions that allow integration of renewable energy sources with the grid. Since one-way flows are evolving into multi-directional flows of energy and digital information, the resulting complexity requires a new, integrated and secure approach to delivering the right information technology solutions. Here lie potential applications for blockchain technologies. Blockchain offers an efficient, secure and possibly cost-effective way to manage transactions via a decentralised tamper proof ledger system.
For example, blockchain technology can be used to create transactive energy platforms enabling secure peer-to-peer (P2P) trading of power within communities. LO3 Energy and Siemens have collaborated on the Brooklyn Microgrid Project which empowers residents to produce via rooftop solar, transact via the platform and consume as needed. Such P2P transactions are cost efficient and secure.
The blockchain ledger system enables smart contracts with self-executing checks and balances based on encryption keys when the necessary conditions are fulfilled. The private key, secret with the user and the public key used for transaction validation must be married to complete transactions. This makes the ledger virtually un-hackable.
The smart meter infrastructure can be one potential application. The roll out of smart metering in India for reducing AT&C losses and increasing efficiency also increases the vulnerability of the electrical grid, which could lead to attacks by hackers.
Here, there may be potential for a good fit between blockchain and smart metering. Blockchain has in built security within the protocol and network, at every node without a single point of failure. Hence, the private keys can be stored securely inside smart meters and will be needed for transmitting sensitive information.
The public key will represent the ID of the meter. To hack this, one will have to decrypt all connected meters simultaneously using a massive amount of computing power which would be close to impossible.
E-mobility is another domain where blockchain can act as an enabler. But scarcity of charging infrastructure is a major challenge. Leveraging blockchain smart contracts can facilitate a decentralised economic model through secure P2P transactions between private charging stations and vehicle owners.
On the transmission and distribution side, blockchain can facilitate central monitoring and control systems to form “Virtual Power Plants” (VPP). With increased transparency and immutability, VPPs can enhance grid security, process efficiency and lead time reduction for energy transactions.
Of course while the governance model of blockchain is yet to be established since the technology is evolving, in the long run, blockchain has the potential to change the landscape of the Indian energy.