Written by Richard Power
Other than requiring more generation capacity, some might struggle at first to see how such technology will have any impact on the energy sector, However, I think Blockchain and IoT could be used along with battery storage and solar and wind generation enable local "micro-grids" to become a reality.
Confused? Well, the technologically-literate can skip the next few bullet-points, but the rest of you, take a deep breath and hang on for the ride:
- Blockchain is a public ledger where transactions are recorded and confirmed anonymously via a large number of independent servers across the globe. Once information is entered and verified, it can't be altered: it is an immutable record of that transaction (and therefore proof of the facts related to that transaction). How does it work? Well, at its simplest level, individuals around the world called "miners" verify transactions and put them into a single block, in return for payment via Bitcoin or a similar crypto-currency. A block generally contains four pieces of information: a reference to the previous block, a summary of included transaction, a time stamp, and Proof of Work that went into creating the secure block. The blocks are strung together into a chain that does not allow for any inconsistencies, and transactions entered are necessarily valid and can be processed. By checking the blockchain and confirming transactions, the entire system is effectively self-regulated and fully secure.
- Smart contracts are enabled by Blockchain technology. Smart contracts are coded instructions which execute on the occurrence of an event. So, for example, monies due under a contract upon the occurrence of an event can be automatically paid, without one contractual party needing to notify the other of that event and then waiting for it to be verified. Blockchain technology determines that the event has occurred and then IT systems automatically carry out the contractually-prescribed consequence.
- The Internet of Things is a concept of connecting any operating device to the Internet and therefore to each other. This includes everything from mobile phones to washing machines and even specific components of machines, such as a gas turbine. The machines can send real-time information about their operation to a central repository for live monitoring, and/or to other components of the overall network in which they operate.
Now, imagine a new housing development where each house is built with Tesla-style solar roof tiles (other brands are available!), a charging point for a car, and geothermal heating (where heat is extracted from the ground). A large scale battery storage facility is positioned centrally, maybe underground, and each house feeds in any excess power generated from its solar tiles to the battery.
Here's where the smart technology could prove it is worth the hype: usage patterns can be established from data gathered via IoT, which in turn enables on-site generated power to be sent from one house which does not need it at that time to another house which does. That same smart technology can send power to and from the on-site storage facility, supplying houses as needed or even selling it into the national grid. Blockchain technology allows each household to become a power trader, buying and selling electricity with their neighbours, with payment carried out via smart contracts.
That would be truly transformative. The prospects for developing economies - with limited infrastructure, dispersed communities requiring energy and an abundance of sunshine - are huge.
The question of how to monetise, and therefore obtain investment, for such projects is another matter, but the potential is certainly there. So, perhaps technology is about to enable the energy sector to boldly go where it hasn't been before…