Digital Grid—Capitalizing on Opportunities with Blockchain Technology
Frost & Sullivan’s upcoming study on Blockchains takes an in-depth look at the addressable market for its existing applications along with emerging energy applications. The energy sector has seen significant changes over the past few decades across verticals such as generation, distribution, storage, and consumption. It continues to transition from fossil-fuel based centralized generation to renewable and distributed generation. There is a also a shift from centrally-owned and -operated power generation to small-scale commercial generation and 'prosumers', whose power flows are bidirectional. Both these forces combine to create significant challenges for the electricity grid’s design, with legacy infrastructure struggling to offer the required flexibility.
A key trend influencing the uptake of Blockchain-related services in the US is the high rate of advanced metering infrastructure (AMI) adoption. States with high penetration of residential AMI meters are more likely to engage in peer-to-peer (P2P) energy transactions and adopt Blockchain platforms to execute them. Of the states with the highest AMI penetration, California and Georgia have the most number of distributed solar PV installations in the country. This makes them the most probabale adopters of Blockchain technology for P2P energy transactions.
Blockchain platforms that allow utilities to empower consumers to simply trade electricity with each other and settle payments with the help of an automated and decentralized system. (repetition) Therefore, this decentralized marketplace will enable utilities to lower their capital expenditure on renewable energy generation, and consumers to enjoy reduced energy bills. Some of the key challenges associated with Blockchain adoption are the uncertain regulatory status of crypto-currencies and transactive energy, nascent stages of technology/product development, and the need for a smart grid communication infrastructure.
Blockchain can also serve as a back-end platform for utilities to track and execute the following transactive energy applications:
Billing platform for retail sales and net metering
Platform for P2P trading and renewable energy certification
International energy trading
Electric vehicle and Vehicle-to-Grid
Key Issues Addressed
Blockchain can provide disruptive technology solutions to address the following requirements
Data coordination between a range of grid and behind-the-meter assets
A secure automated trading platform
Open access for innovative products and services.
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