Paramount Software Solutions Inc

Transforming Energy Generation, Consumption, and Trading with Blockchain Technology

Blockchain technology – a decentralized, distributed, public ledger that records transactions – has disrupted several industries driving increased transparency and security. While the energy sector has been relatively slow with its adoption of blockchain, its potential and application are being realized rapidly, making inroads into the industry.

What can blockchain bring to the table?

Efficiency : A distributed ledger can help eliminate time-consuming record reconciliations and speed up transactions. The simplified processes and infrastructure will require fewer intermediaries thereby increasing operational efficiency and reducing costs (for both homeowners and grid utilities).

Security : Blockchain provides the highest level of security and control by design. Members verify all data before being attached to a block, and each block is cryptographically secured. The high encryption leads to increased data protection and lesser fraud risks.

Transparency : Data on the blockchain is recorded in chronological order and can be accessed by all blockchain members. The increased transparency for stakeholders can lead to better demand management.

Decentralization : Any member can add transactions to the ledger without third-party intervention; data created is then accessible by all network members.

Immutability : Once data is entered into the blockchain, no participant can change or tamper with it. If the transaction recorded includes an error, a new transaction must be added to reverse the error.

Uses-cases of blockchain implementation in Energy

Blockchain technology can be used to optimize energy trading and transactions between generators and consumers of energy.

Peer-to-peer Trading

While renewable power generation is on the rise, system stability on national levels is one of the key objectives of power grid management. Through automated smart contracts, direct peer-to-peer (P2P) can help aggregate virtual power plants and sell excess renewable energy to other network participants. These energy markets benefit the masses by reducing control from central authorities, such as wholesale entities.

This model could help many countries reach energy parity as renewable energy costs eventually become equal to or lower than traditional energy. At a granular level, within countries, the availability and accessibility could mean that individuals who produce their own energy will have the ability to trade it with their neighbors and peers.

Instant transactions and settlement

The backbone of blockchain technology is its ability to provide a reliable and secure platform to record transactions and track ownership. Transactions can be automatically validated using smart contracts and can completely eliminate reconciliations. Any error in transaction entry would require a new transaction to be entered to replace it. The new one and the old one will be displayed in one place for full visibility.

Validated transactions can then instantly be processed for settlements.

Efficient Grid Management

Blockchain technology can enable automatic control of all power and storage flows along the grid to balance supply and demand. In the context of increasing intermittent renewable energy integration, this could lead to smarter, cost-efficient consumption. The reduced wastage and smarter utilization of power can lead to a more sustainable environment.

Outlook for the future

Blockchain can enable dynamic changes in the energy industry if implemented vastly and quickly. It can stand to improve the sector’s consumption, transparency, reduce costs, encourage and facilitate the use of renewable energy through P2P trading models, paving the way for a very promising future.

At Paramount, we recently worked on an Energy Accounting System that integrates residential, grid, and energy trading markets on the blockchain to transform power generation and consumption for the Energy Blockchain Consortium. The easy to access web and mobile app allows users to manage their carbon footprints by calculating their energy consumption and placing orders for required carbon offsets from certified wind and solar farms. The solution not only leverages the power of blockchain technology to drive transparency and visibility, it also helps reduce carbon emissions and work towards a greener environment.

Written by – Shilpa Pai – Project Manager, Paramount Software Solutions

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Transforming Energy Generation, Consumption, and Trading with Blockchain Technology

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