Page 80 - North American Clean Energy March April 2018 Issue

energy efficiency
Blockchain’s Promise
to Revolutionize the
Energy Sector
by Peter Bronski
IN EARLY FEBRUARY, TESLA AND THE
government of South Australia announced what was being been billed as the world’s largest
virtual power plant. Combining rooftop solar
PV and behind-the-meter batteries, the 250 MW system would ultimately include roughly 50,000 households. Meanwhile, that same week, the European Union announced formation of an observatory and forum, alongside €100 million ($124 million) in funding, dedicated to researching uses for blockchain technology. Also that week, Bloomberg New Energy Finance released a report highlighting $143 million in investment by 135 companies supporting blockchain applications for the energy sector speci cally.
ese seemingly unrelated anecdotes signal two mega trends on a potential collision course for electricity systems around the world: 1) the accelerating decentralization, decarbonization, and democratization of the grid, and 2) the rise of blockchain applications beyond cryptocurrencies and payments, including for energy-sector applications, from distributed energy resource (DER) integration to renewable energy certi cates of origin to peer-to-peer energy trading networks (and many other use cases).
From Bitcoin to Blockchain
Bitcoin, the popular digital cryptocurrency, is the best-known application of blockchain technology. Blockchains are a form of distributed ledger. Unlike centralized cloud computing (which are often proprietary, closed systems), blockchains are heavily decentralized, with identical copies
of the ledger residing on many independent computers around the world. ose computers must cross-validate blocks of transactions
and agree to add them to the ledger, making blockchains especially secure against corruption via cyberattack or bad actors.
Such an immutable, secure ledger enables participants to agree on a record of information (without the same needs for independent third parties), automate previously cumbersome processes, and lower transaction costs. While Bitcoin’s value and energy use have dramatically increased over the past year, and captured many headlines, the underlying blockchain technology is the real story.
Cryptocurrencies such as Bitcoin are but one use of blockchain technology, which also has tremendous potential to transform a variety of industries. e energy sector—with its myriad
participants, resources, markets, and regulations—is particularly ripe with opportunity. Blockchain is poised to support and accelerate the transition to a decentralized, democratized, decarbonized electricity grid.
The Rise of DERs and Smart Devices
It’s no secret that electricity grids across North America and globally are undergoing a fundamental transformation via:
• Decarbonization: the rise of renewable energy, including wind, utility-scale solar, and commercial and residential rooftop solar;
• Decentralization: the rise of customer-sited distributed energy resources such as rooftop solar, energy storage systems, smart thermostats, electric vehicles and EV charging, smart appliances, etc.; and
• Democratization: the ability for customers to provide value to the grid, trade among themselves in peer-to-peer exchanges, and/or participate in various existing retail and wholesale electricity markets
But are these mega trends poised to "break" the electricity grid, so to
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