Researchers at the National Renewable Energy Laboratory (NREL) are evaluating the use of blockchain for transactive energy using hardware in the laboratory’s Energy Systems Integration Facility (ESIF).
Distributing grid operational decision-making is revolutionary. It’s really like somebody in the 1980s expounding on the economic opportunity of the Internet. Everyone would have laughed at you. That’s kind of what’s happening right now with blockchain applications—the foundational tools for another technology revolution are emerging, and this could be one of them.
—Dane Christensen, a mechanical engineer in NREL’s Residential Buildings Research Group and a principal investigator on a blockchain pilot project
Blockchain serves as a distributed digital record of actions agreed and performed by multiple parties. Blockchain’s primary value is providing mathematical proof about the state of data, so that different parties to a transaction can agree on the outcome even if they do not know or trust each other. Though commonly associated with cryptocurrencies such as Bitcoin, blockchain technology can be used with virtually any type of transaction involving digital ownership in real time. These technologies rely on established cryptography and consensus mechanisms to ensure transactions remain secure, and an entire industry has emerged to apply blockchain technology in resolving real-world challenges.
Potential opportunities abound for the use of blockchain in the energy sector. The Congressional Research Service last year noted increasing interest among producers of distributed energy resources (DERs)—such as rooftop solar—to sell electricity to neighbors. Congress’ public policy research arm predicted that if this approach proves “practical and economical, blockchain technology could alter the manner in which electricity customers and producers interact.”
Today, utilities use complex software platforms called an energy management…