According to a recent report from the Yonhap news outlet, a South Korean local government will be spending 4 billion Korean won (approximately $3.5 million) to build and deploy a blockchain-enabled virtual power plant. This project was proposed by the city administration of Busan, South Korea’s second largest city, and will involve partnerships with a slew of organizations including Busan City Gas, the Korean Industrial Complex Corporation, Nuri Telecom, and the Pusan National University.
South Korea Blockchain-Enabled Virtual Power Plant
In a push to modernize its power distribution and improved efficiency, Busan will launch this blockchain-enabled virtual power plant (VPP) that will utilize renewable power generating units which depend on cloud-based decentralized networks. These renewable units will consist of “solar parks” and “wind farms” which will function together as a single power plant by leveraging the “idle power from multiple distributed power sources.” This new system will provide easy access to data for energy traders and will also significantly improve overall forecast and trading of renewable energy.
The blockchain VPP will create operational efficiency and improve the monitoring and distribution of multiple energy sources while also boosting power generation in areas lacking sufficient power supply. Under this system, energy consumption demands can be limited during peak periods and redistributed to areas in need of power. This generation and distribution process will allow Busan to decrease its dependence on conventional energy sources.
Busan vs. Seoul
When it comes to blockchain adoption, Seoul has made a name for itself by spearheading a series of blockchain related programs which are slated to completely modernize the city and its infrastructure. With these citywide blockchain initiatives, Seoul has earned the name “Blockchain Hub of South Korea.” However, with the blockchain virtual powered plant, the city of Busan has now entered the tech adoption race as well.
According to a Busan city official:
“Busan will take the lead in the futuristic power relay trading [and the]virtual power plant platform market with this project. In the future, we intend to focus on energy efficiency and energy-related new industries to realize clean energy city Busan.”
A similar power project was also recently unveiled in South Korea by Korea Electric Power Corporation (KEPCO); the biggest power generation firm in the country. KEPCO intends to develop micro-grids (MGs) which utilize blockchain technology to improve energy efficiency and distribution. Kim Jong-gap, the president and CEO of KEPCO has identified decarbonization, decentralization, and digitization as emerging trends that will eventually shape the future of the power generation industry.
To further promote the advancement of blockchain in the city, Busan’s Minister of Economic Affairs was reported to have held a meeting to discuss the establishment of special zones within the city which will operate as friendly environments for blockchain and crypto development. Seoul is also working on a similar blockchain initiative and has announced it will commit 60.3 billion won to establish business complexes and blockchain-focused education centers across the city.
South Korea Blockchain Adoption
The establishment of blockchain virtual powered plants is just one of many blockchain based projects scattered across the country covering both the public and private sectors. Shinhan; South Korea’s second largest bank is also working on a distributed ledger technology (DLT) solution to help curb human error associated with the processing of financial transactions and enhance financial record keeping processes by utilizing smart contracts. The South Korean government is also seeking to advance governance, communication and supply chain management by introducing blockchain based e-government services and DLT solutions that cater to the pharmaceutical industry, hospitals, food supply chain management companies among others.