Blockchain technology can be used to innovate green energy markets, researchers say

Usage of blockchain technology for trading green energy markets is already taking shape. Researchers are now confident that in future, blockchain will play a major role in advancing green energy policies.

Integration of blockchain technology in various technologies has resulted in innovative ideas that are changing the scope of entire industries. The latest development, however, is redefining the future of capitalizing the fight against climate change.

Research on the integration of blockchain technology and green energy trading

Researchers at Ireland’s Economic and Social Research Institute (ESRI) have proposed a forward trading system that is based on blockchain technology. The system will be used for smart management of renewable energy consumption. This technology integration will help in advancing the usage of green energy and optimize the efficiency of energy usage.

In a paper published on 20th December 2019, the researchers, Mel T. Devine, Marianna Russo and Paul Cuffe, outlined how they would approach forward trading using blockchain. They indicated plans for a new mechanism for forward selling renewable electricity generation. They also continued by explaining how they will tokenize interactions between energy providers and consumers.

The technology is based on blockchain and will involve power providers directly selling to consumers a claim of future power output in the form of nonfungible blockchain tokens. They will use cyberspace for all transactions, thereby making its availability easy.

The researchers said,

Claims on future electricity production can be directly traded between generators and consumers through blockchain in a cyber-physical marketplace […] power contracts for future delivery are transacted on the blockchain. These claims on future generation could be embodied as nonfungible blockchain tokens with future electrical power delivery as the underlying asset.

The process will be beneficial for both consumers and power distributors in that it will ease the complex nature of interactions between the two. It will also be easier and simple to use due to the automation of energy control and usage of smart contracts in the process. The trading and management of power will also be easy due to the usage of smart contracts.

Adoption of blockchain technology by energy firms is already taking shape with Japan’s second-largest power utility, the Kansai Electric Power Co Inc (KEPCO) making use of the technology as from December 2019.

South Korea’s largest power provider, Korea Electric Power Corporation also signed a contract with two companies to migrate to a blockchain-based system. The two energy provider companies will use a blockchain-powered system for transacting renewable energy certificates.

 

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