Utilities may see blockchain as a threat to disrupt the energy sector given the technology’s potential to help decentralize and transform the electric power delivery model. But instead of resisting it, they are exploring ways to embrace the technology, especially as a tool to enhance operations, reduce costs, and make better decisions.
U.S utility giant Pacific Gas and Electric Corp (PG&E) is one of the largest energy companies that are currently prioritizing operational efficiency over complete decentralization and disintermediation. The San Francisco-based utility presented a number of blockchain pilots that it is pursuing at an event in San Francisco last week, which suggested that PG&E is leveraging blockchain to help it manage customers more effectively and meet federal policy objectives such as carbon emission reductions.
Blockchain ability to decentralize data holds a great promise to utilities as it offers enhanced flexibility when it comes to running renewable energy projects or verifying emissions. The technology other benefits include securing and verifying data as well as building trust in a system where many transactions are recorded. A blockchain-based system would ensure the immutability of records as well as a complete “chain of custody” of information related to the volume of renewable energy generated, from the windfarm all the way to rooftop solar installations. These potential benefits combined with the trend for organizations to move towards energy decentralization have pushed PG&E as well as other utilities to look at blockchain as a way to boost both consumer satisfaction and grid efficiency.
PG&E blockchain to track steel reels
PG&E serves 16 million people which represents a massive portfolio of installed power infrastructure considering that the company also has 340,000 solar rooftops, with 6,000 new ones joining the grid each month. The utility is hoping blockchain can help with managing this growing energy demand. The first blockchain pilot to that effect is steel reel traceability system that uses distributed ledgers to track the chain of custody of steel reels that carry overhead cables. Such a platform would allow the utility to streamline operational processes by replacing manual paper-based processes with automated workflow and process digitization. If it becomes successful, the blockchain solution could be rolled out on a large scale include tracking of other grid materials such as transformers, electric poles, and electric pipes.
Carbon credit trading
The market of Renewable Energy Certificates (REC) is one promising area that blue chip energy companies like PG&E are looking to capitalize on. RECs enable energy producers to trade directly with consumers and investors can raise money by selling energy upfront, at below market rates. PG&E is working with BMW to create carbon credits for electric vehicle (EV) drivers in the San Francisco Bay Area based on the emission profiles of when they charge their cars. The idea is to incentivize EV drivers to charge their car during periods when the grid is filled with solar generated energy to maximize their carbon reduction compared to charging during peak periods. EV users would have the opportunity to monetize their clean charging choices by trading their credits on California’s marketplace
Other leading U.S. utilities are piloting distributed leader technology to reduce operating costs, improve their business operations as well as the management of their infrastructure. For instance, New York utilities New York Power Authority and Con Edison have been collaborating to validate blockchain use cases such as customer management, cybersecurity enhancement, and DER management.