The utilities landscape is slowly transforming into a smart power grid with both residential and business customers leading initiatives towards distributed power generation. At the same time, utilities are also making considerable investments by upgrading their grid infrastructures and installing smart meters to make distributed and smart power grid a reality. However, this strategic shift doesn’t come without pain points as the industry is facing unique challenges during the transition.
In addition to these industry trends, the emergence of service providers focusing on customer empowerment and demand response aggregators, the utilities ecosystem is growing. To address these challenges, utilities have been looking for new and improved business models and technologies. As this effort goes on, a growing number of industry players have identified that blockchain technology has significant potential to provide a secure and trustworthy platform to manage smart devices and distributed grid environments.
How New York utility companies are using the blockchain to transform their business?
Many energy companies that are exploring blockchain technology to assess its uses and various applications by launching pilot projects and understand if the technology can meet both the business and technical requirements. Avangrid along with two other New York utility companies New York Power Authority and Con Edison are working together to understand how shared blockchain infrastructure can be used to benefit their customers.
The utilities have been collaborating with Indigo Advisory Group, a strategic consulting firm specializing in the energy sector, to identify blockchain applications and use cases. Several key use cases were identified for blockchain applications:
Management of customers
With blockchain technology, customers could securely and transparently manage their energy sharing agreement across the participating utilities and registered DER providers using a trust portal. The distributed ledger technology would ensure the integrity of the transactions and verify that transaction data is properly shared from the utilities to the third parties. This would enable customers, utilities and third parties along with regulators to have an audit trail of these transactions through a shared and reliable system of records to ensure operational efficiency and compliance.
Creating decentralized energy markets
The focus is to provide a decentralized peer-to-peer transaction system where electricity valuation and settlement across time and location could be fully automated using smart contracts. This information can be then recorded in the distributed ledger to make the process easier to audit as well as more efficient and transparent.
Focus on boosting cybersecurity
The cohort has also come up with the unique idea of deploying and provisioning IoT devices such as smart thermostats at the grid edge to enhance cybersecurity. This approach can be effective in providing device authentication using blockchain encryption capabilities and distributed ledger which can further prevent intrusion or tampering with sensitive and confidential records.
Effective DER management
The distributed ledger technology may be key for storing references regarding meter data collected using smart meters which can be used to validate the results of standardized measurement and verification cost avoidance analysis. Blockchain technology can help provide increased data security and privacy with real time automated demand response events and enable events validations with financial settlement.
Additionally, blockchain solutions may also be used for automated verification of data using smart contracts that provide instant notifications when specific criteria is met.
Better Carbon REC Management
Considering that load-serving entities in New York need to purchase Tier-1 renewable energy credits each year, blockchain could be used to automate credit purchases using smart contracts which would reduce administrative costs and streamline the overall process.