Our ability to generate renewable energy is scaling up fast, and solutions to integrate that energy will rely on technologies like blockchain to help keep new solutions on track. Power Ledger’s executive chairman and co-founder, Dr Jemma Green, looks at the role blockchain plays within her company’s platform to integrate and automate solar energy trading and balancing.
This article first appeared in 'Storage & Smart Power', Energy-Storage.news' dedicated section of the quarterly technical journal PV Tech Power. Volume 23, in which it appeared, was first published online in mid-June.
With the COVID-19 lockdown still in effect, our team has been working from home more frequently. This has given me pause to observe the solar panels on roofs in my neighbourhood.
It’s inspiring to see so many people embracing a renewable energy source, but I’m reminded that no matter how good its products are, the success of any business is largely determined by economic conditions.
That’s an insight I saw played out many times during my career with J.P. Morgan in London. And it’s influenced my work in environmental sustainability to help create Power Ledger – an energy trading platform that uses blockchain technology to record and track renewable energy transactions.
Power Ledger’s mission is to deliver clean, low-cost and resilient distributed energy markets by providing a market mechanism for energy trading and fostering the economic conditions for its long-term success.
Because despite the best intentions of environmentalists, simply swapping grid power for solar panels or replacing coal-fired power stations with wind farms creates grid instability. Unless the right economic conditions are created and sustained, renewable energy may cause as many problems as it solves.
And digital solutions like Power Ledger’s blockchain-facilitated energy trading platform, which can dispatch battery-sourced energy in the peak, and stabilise the grid, seem to be in the right place at the right time.
So, while the socially distant view of my neighbours’ renewables reminds me of the green energy sector’s many challenges, I’m also fired with the belief that our sector finally has an enormous opportunity in its grasp.
Solar panels and algorithms
Over many years the global energy sector has been transitioning from a centralised system with a small number of very large power plants, to a distributed cleaner electricity grid. On a macro scale, we are seeing wind, solar and even wave-based renewable technologies supplementing and replacing coal and gas fired power stations. And on the micro level, solar panels, smart meters and battery storage are alleviating demand on the fossil fuel-powered grid.
The opportunity Power Ledger has identified is to link the macro of green energy production to the micro through a trading platform that businesses and everyday consumers can use to trade energy peer-to-peer and to the market to stabilise the system. There are many possible configurations.
A household with solar panels can sell excess power to a neighbour. A household with a battery can sell services to the grid to keep it stable. Another household using the Power Ledger platform can choose
to source its power from an external renewable source. Businesses can do the same, either selling their excess renewable power or using the platform to tap into a green source.
Even those without solar panels can still access renewables from sellers in the Power Ledger network and its partner retailers.
All of this is made secure and convenient through the Power Ledger platform’s use of blockchain technology to record and track energy transactions. This allows for greater transparency, increased automation and reduced possibility of human error.
For energy retailers, the blockchain-enabled platform improves efficiencies by enabling peer-to-peer (P2P) transactions, virtual power plants (VPP) from small batteries combining, renewable energy certificate trading, as well as energy provenance tracking.
The apex of all of this is to create an economically viable market for renewable energy, driven by secure peer-to-peer trading that fosters true demand.
Power Ledger in action
Blockchain technology can create a decentralised market for VPPs and P2P energy trading as it can handle transactions and payments on both sides of the meter, in real time, at a lower cost to all involved. Using a blockchain can facilitate cross-retailer trading and settlement too, fostering network market effects such as greater liquidity and efficiency in the market.
An example of our technology’s potential is Power Ledger’s partnership with green energy retailer ekWateur in France using our blockchain-enabled product Vision, which certifies the origin and source of renewable energy and allows customers to choose their own mix.
More than 220,000 electricity meters across France are gaining access, so that households can choose their power sources, including renewables like wind farms and neighbouring solar panels. Every transaction is securely traced and tracked and the whole process is made as simple as possible for users.
Whilst the ekWateur partnership is just one example of the power of sharing energy, it also demonstrates the new products and services being built on top of the grid.
Generating virtual power plants
Grid stabilisation services have historically come from traditional energy sources like coal and gas-fired power plants. But as there are fewer of these and more solar the grid is becoming unstable.
Batteries, coupled with the Power Ledger platform’s VPP feature, allow energy stored to be dispatched to stabilise the grid. This arrangement encourages more people to use blockchain-enabled trading technology, creating a larger network of users that bolsters the economic viability of renewables and provides a low-cost and stable energy system.
This is more than simply placing solar panels on a roof or installing a smart meter – this is an entirely new market-place of energy trading that can be activated with the flick of a switch.
Benefits of using blockchain
The reason Power Ledger has based its trading platform on blockchain technology is twofold: firstly, it’s secure and fast and secondly, it creates new efficient markets.
Through blockchain, users can trace and verify that they are receiving energy from renewable sources and have confidence that their financial transactions are being securely recorded and enabled. More crucially, blockchain connects smaller buyers and sellers together in a low-cost fashion and allows for faster settlement compared to longer settlement periods with the current energy market. With blockchain, settlement can be achieved in real-time.
The advantage of simplicity, speed and security is that consumers can embrace the technology quickly and become part of a growing global network, creating more demand and opportunities for fulfilment.
This allows the marketplace to grow and provide a viable and reliable economic base for the renewable energy sector.
Creating green economies of scale
To build the operating system of the new energy marketplace, we need to ensure the existing infrastructure has the required supporting technologies.
With Power Ledger’s energy trading platform now in use in Australia and nations such as France and Thailand, the technology is helping to redefine how energy is distributed, managed, traded, used and governed.
Blockchain technology has the potential to transform the energy sector as it improves transaction efficiency, enables price setting and allows for energy to be traded easily peer-to-peer.
The next challenge is that of scale – to deploy blockchain enabled trading of energy across as many networks and sectors of the market as possible.
Whilst Power Ledger is seeing successful take up of its technology offering, I believe the time is ripe for more rapid shifts in energy systems and markets.
My hope is that the challenges faced by the renewables sector in the coming years will not be how to grow, but how to keep up with the demand for growth.
Cover Image: A rooftop solar installation in Bangkok, Thailand, where the Power Ledger technology has been introduced. Image: Power Ledger.
This article first appeared in 'Storage & Smart Power', Energy-Storage.news' dedicated section of the quarterly technical journal PV Tech Power. Volume 23, in which it appeared, was first published online in mid-June. Download the entire 96-page journal as a PDF, free of charge, from the PV Tech Store.