Energy in itself is the SuperPower and to allow using it to it’s optimistic potential, is in the Blockchain’s capacity…
Imagine a regular energy consumer having the ability to share his/her extra energy to others who need it, for a revenue amount. It’s a brilliant concept of energy utilisation to its best along with revenue generation, without the interference of the middlemen and additional management costs. This can be possible with the help of Blockchain technology. Blockchain technology has the capacity to disrupt the energy sector and bring it to a next level.
The global electricity market can be empowered when every consumer can also become a producer. This terminology is also called creating “Prosumers”. Prosumer=Producer + Consumer. Generating a smart electric grid has the potential to enable, track and verify thousands of real time energy transactions. This ultimately improves productivity and creates a more reliable, secure and robust system.
Some of the major Issues in Energy sector in the conventional system
In almost all the regions of the developing nations, the energy transactions are done through central electric board systems. This ultimately makes the payment processes complex and delayed, hampering the reliability.
Low automation and digitization
Energy value chain audit and processes need to be automated and digitized for faster and more secure energy deals. Conventional systems usually lack high end technological aid to the industry sectors
To enable, manage, track and verify energy audits and transactions, it needs the involvement of respective third party companies. This definitely involves costs and makes the system inefficient.
Due to a lot of interference from middlemen and third party agencies , the energy cannot be reached to the low privileged classes. And there are high chances of energy frauds and intrusions.
Non-automated and manual systems lead to delayed and cumbersome audits. And involves additional cost for executing the same.
Partners involved in Smart Contract for Energy
All the activities are authorized by the smart contract partners and only then executed to ensure secure deals throughout. The smart contract participants of the energy sector can be, not limited to, wholesale gas and electricity markets, authorized financial companies, end consumers, prosumers etc.
The blockchain technology can be leveraged by the smart contract parties to generate the distributed energy transactions and create a virtual electric grid. The consumers shall be able to trade within themselves without any middlemen with the help of IoT, AI and blockchain integration.
How Blockchain can help overcome the issues and improvise the system
Device communication and Digitization
For energy sharing and audit, device communication is highly crucial, which can be done with the incorporation of IoT , AI and blockchain. This would make device communication and digitization possible at ground levels as well.
A new concept of “Smart homes” will become a reality where the devices like washing machines, solar panels, fridge, battery and storage devices can connect and communicate with each other.
Once the digitization happens, it would become easier to share electric power within the consumers for a revenue exchange.
The revenue exchange with electric sharing and selling can be possible through the micropayment system built on top of blockchain. That becomes a faster, fair and secure finance transaction.
The “proof of origin”of the power supply is hard to trace in terms of conventional systems. However as the history of all the data is present on all the peers of the blockchain network, it can be easily traceable in the new system. This makes the energy distribution fair and authentic.
Low maintenance cost
Due to decreased need of middlemen and third party agencies, the maintenance cost shall automatically go low in the blockchain based system.
Simpler invoice and audit management
Automated and digitised systems would allow tracing, verifying and managing the invoices easier along with a much smoother audit management.