The utilities sector is experiencing an unprecedented wave of disruption. With renewables, distributed generation is picking up pace, consumer behavior is changing, and, as the cost of storage systems falls, many traditional utilities consumers are becoming prosumers (both consumer and producer of electricity) instead. Blockchain technology, which has greatly impacted the financial sector, also has the potential to disrupt the utility sector in this changing scenario.
The concept of the blockchain can be applied to the broader strategy of the electric utilities to establish trust in the growing volume of renewables and to make exchanges more transparent. Until now, the use of blockchain in peer-to-peer (P2P) energy markets was largely a nascent idea, with some proof of concepts being thought of. At Capgemini’s Utilities Centre of Excellence, we have developed a solution for how blockchain technology can be used to change the traditional centralized electricity market to a decentralized one for trading electricity as an asset on a blockchain-enabled platform. Thus, both consumers and prosumers will be able to trade electricity in an open trading market and to realize better socio-economic benefits.
In a distributed generation scenario, the excess energy generated by prosumers will be treated as tokens, which will be placed in a blockchain-enabled open P2P market for consumers to purchase. Upon purchase, a contract will be drawn up and, ultimately, the energy coins will be updated in their wallets.
Many countries have already invested heavily in AMI implementations and the adoption of microgeneration is also growing rapidly. Nevertheless, the electricity generated can either be used at the generation site or sold to the grid at a relatively low price. So, in order to achieve the desired financial benefit from microgeneration, P2P energy trading will be an ideal platform and blockchain technology will play a game-changing role in developing that platform.
Our solution mainly aims in proving the concept with a live environment that can be customised to meet the requirement of the geographies.
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