Blockchain technology has been largely confined to finance and cryptocurrency.
The distributed ledger system’s relevance in other areas of business are slowly coming to light.
The first use of the technology in the world of renewable energy happened in Australia.
The RENeW Nexus project found that peer-to-peer-based solar energy trading is ‘technically feasible’ after testing 48 households in Fremantle, Western Australia.
The project is funded by the Australian government’s smart cities initiative, and is run on Power Ledger’s blockchain technology. Curtin University and Murdoch University are also involved in the project.
Power Ledger is a software company that facilitates electricity and environmental commodity trading with the help of blockchain technology.
For this project, Power Ledger’s blockchain platform was used to allow consumers to trade solar energy and set electricity prices by themselves.
It had also set up a virtual power plant that acts as a cloud which stores excess solar units.
The project had also included a microgrid with a 670kWh battery that was set up to service homes within the east village development in Fremantle.
While the trial showed that solar energy trading made its participants worse off financial as the local Australian electricity provider charged a subsidised rate, the blockchain-based trading platform showed several potential benefits.
One of the key benefits accrued from faster settlements. Consumers wait 60 days for their electricity bills and any income from feed-in tariffs. With the blockchain technology, settlements were made in real-time.
Another benefit came from tokenised funds that were released upon meeting pre-specified conditions, such as optimising a battery for the highest value activity without any manual handling required, reducing transactional friction and providing a faster settlement process.
“Power Ledger has demonstrated how peer-to-peer energy trading can incentivise the right outcomes for the grid in a more cost-effective way,” report co-author and Power Ledger Chairman Dr Jemma Green said in a statement.