OPINION: Synergize blockchain, renewable energy to revolutionize green power – ET EnergyWorld

Blockchain applications in renewable energy hold a lot of promise in shaping a sustainable future as we take on the onerous challenge of mitigating climate change, a threat staring us in the face with the greenhouse effect prompting the UN to sound an ominous warning that the next five years will be the warmest ever. Synergising blockchain with renewable energy technologies not only offers far-reaching benefits on account of its decentralised, transparent and immutable nature, but can also revolutionise the renewable energy sector by paving the way for greater efficiencies.Get a real feel with real-time tracking

Providing a comprehensive and tamper-proof record of renewable energy production, distribution and consumption, blockchain’s distributed ledger brings about transparency, enhances accountability and instills a sense of confidence in consumers and investors. Real-time tracking of energy sources enables end-users to make informed decisions about their energy consumption, thus promoting the sustainable energy initiative. A blockchain-based platform developed by a UK-based startup, for instance, is enabling companies to track the origin and carbon footprint of their energy supplies, thus fostering transparency
and trust.

The use of blockchain to track carbon footprint is also quite crucial as it helps in accurately measuring, verifying and reporting the carbon emissions associated with renewable energy generation and consumption, thus providing a reliable system to track the environmental impact of green projects and ensuring the credibility of renewable energy certificates.

Pepping it up with P2P trading

Blockchain-based platforms and smart contracts can facilitate peer-to-peer (P2P) energy trading, thus empowering individuals and businesses to transact renewable energy directly. This decentralised approach eliminates intermediaries, reduces costs and enables efficient utilisation of renewable energy resources. It also gives more power to consumers by enabling them to choose their energy sources and monetise excess energy generation, thus making the energy market more inclusive. A notable example of this is the Brooklyn Microgrid project in New York that uses blockchain technology to enable neighbours to trade in renewable energy. This peer-to-peer energy trading model allows for more efficient use of locally generated renewable energy and reduces dependency on traditional grid infrastructure.

Likewise, UK-based Exergy also enables peer-to-peer trading of renewable energy through its blockchain technology by allowing producers to sell their excess energy directly to consumers without the need for intermediaries, thus ensuring transparency and security in transactions even as smart contracts facilitate
automated settlement between buyers and sellers.

Optimised systems, enhanced security

Blockchain’s inherent security features protect energy-related data from unauthorised access and tampering. By storing data on a distributed ledger, blockchain enhances cybersecurity in the renewable energy sector. Furthermore, blockchain-based solutions can optimise energy management systems, ensuring efficient allocation and utilisation of renewable resources. A working example of this is the EU-based WePower platform, which uses blockchain technology to securely record renewable energy generation and consumption data. By ensuring data integrity and eliminating intermediaries, WePower streamlines the process of investing in and financing renewable energy projects.

Develop supportive policy frameworks

The integration of blockchain with the energy industry necessitates regulatory and policy frameworks that address legal, privacy and security concerns. Policymakers must navigate the intricacies of blockchain technology to ensure its seamless integration with existing energy systems. Collaboration between industry stakeholders, policymakers and technology experts is crucial to develop supportive frameworks and unlock the full potential of the renewable energy sector.

Ideally, the regulatory and policy framework for the integration of blockchain and renewable energy should strive for furthering innovation, bringing transparency, ensuring security and encouraging the efficient deployment of renewable energy resources. To begin with, there should be clear-cut regulations that guarantee a legal status for blockchain-based renewable energy projects in terms of digital tokens and smart contracts. This should be followed by standardisation of blockchain protocols to enable efficient data exchange, smart contract interoperability and collaboration between different stakeholders. Another important aspect is the implementation of blockchain-based systems for renewable energy certification with the aim of enhancing trust and reliability in renewable energy markets and facilitating the trading and verification of renewable energy assets.

Develop protocols to innovate, collaborate

Interoperability and standardisation can play a pivotal role in realising the full potential of blockchain and renewable energy integration. Ensuring compatibility and seamless data exchange among various blockchain platforms and energy systems is essential to achieve this. We need to develop industry-wide standards and protocols to facilitate integration, foster collaboration and promote innovation.

Global non-profit organisations are working towards establishing open-source blockchain frameworks and protocols specifically designed for the energy sector. These efforts are focused on creating interoperable solutions that enable secure and efficient communication between diverse energy market participants.

Pioneering initiatives continue to inspire

Several pioneering initiatives have already demonstrated the successful integration of blockchain and renewable energy, serving as an inspiration for future endeavours. Blockchain enables transparent and efficient management and trading of carbon credits and renewable energy certificates. One such blockchain-based carbon asset management platform in China is enabling the tracking and trading of carbon credits, thus promoting the adoption of renewable energy projects.

Blockchain can also enhance the traceability and transparency of renewable energy supply chains. A a P2P energy trading platform developer from Australia has demonstrated this by partnering with a Thai renewable energy company to develop a blockchain-based digital energy business to enable P2P energy trading and traceability of renewable energy in Thailand’s energy market.

Heralding the transition to low-carbon economy

We need to emulate such examples on a wide scale to make a real difference. Decentralised marketplaces powered by blockchain eliminate intermediaries, reduce costs and ensure trust by recording every step, from energy generation to consumption, on an immutable ledger. This incentivises renewable energy generation and rewards sustainable practices. By fostering innovation, standardisation and interoperability, we can create a robust ecosystem that is capable of accelerating the transition to a low-carbon economy powered by sustainable energy.

[This piece was written by Vikram R Singh, Founder and CEO of Antier, a blockchain consultancy firm]