Blockchain technology has exploded beyond its Bitcoin-based origins into a growing number of industries. Is the utility sector next? Here, Matthew Grantham, Sales and Business Development Executive at Power Ledger, delves into how blockchain could be used to transform energy trading and make the market more accessible than ever.
Mr Grantham discussed blockchain’s potential to make the energy market accessible for smaller participants, allowing them to trade on an equal plane with more established players.
“The key thing that blockchain enables is the ability for very small users and producers to transact value as if they were a larger market participant,” Mr Grantham said.
“This creates liquidity for these markets and should make them more efficient over time.”
A blockchain-enhanced energy network will create opportunities where hardware — e.g. poles, wires and voltage stabilisation devices in the case of the energy industry — is disrupted by software solutions that perform more cheaply and effectively.
“In the longer term we are hoping that blockchain will create locally-based price signals that will encourage load and demand to be co-located,” Mr Grantham said.
“Consolidating these resources will prompt a more efficient use of transmission and distribution infrastructure.”
Managing a two-way grid
Blockchain’s integration with distributed energy resources (DERs) depends on whether it can plug into a common set of market rules that all DERs can agree on. According to Mr Grantham, achieving stability for participants in this system will be a significant hurdle.
“A major challenge for blockchain is to establish a set of location-specific autonomously-executing rules that balance the value for the owner with the performance of the system as a whole.”
Organisations may also face difficulties with streamlining the high quantities of data inherent in blockchain, which must be delivered almost instantaneously in order to be effective, and while conforming to the market’s chosen DER asset management approach.
“Scalable blockchain solutions can manage data well, but if price signals are not delivered in near real-time, then there is much less value created for the DER,” Mr Grantham said.
“Utilities will also face the challenge of managing their asset bases in both a centralised and distributed market with a single corporate strategy.”
Energy providers can already take certain steps to help prepare for wider blockchain adoption. These include exploring different DER configurations, and staying informed about potential roadblocks to integration.
“Starting to experiment with new distributed energy business models now and getting on top of what any implementation risk would be is a great start,” Mr Grantham said.
“That way, if there is scalable adoption of blockchain, the companies that have figured this part out will be in a good position to take advantage of the tailwind.”
Matthew Grantham is no longer available to speak at Digital Utilities 2019.