Peer-to-peer (P2P) power trading presents a promising use case for blockchain technology and supports transactive energy, according to a report from Navigant Research. Owners of distributed energy resources will be the first stakeholders.
Blockchain technology could provide a new model for transactive energy, which refers to the economic and control techniques used to manage the flow or exchange of energy within an existing power system. The report examines the requirements for an energy blockchain, offering case studies, recommendations and implementation challenges for the energy industry, and an analysis of how P2P power trading supports transactive energy.
A Flexible, Low-Cost Approach
According to the report, “Blockchain Enabled Distributed Energy Trading,” using blockchain for P2P trading provides a flexible and low-cost approach to highly granular transactions that are difficult to replicate in a centralized system and it places consumers at the heart of the smart grid.
Blockchain has an application where there is a need to accelerate transaction times, reduce transaction costs, remove centralized market control and ensure trust among different market participants.
“While financial services has led the development of blockchain, utilities are starting to realize the technology’s potential—a number of proofs-of-concept have been launched, and we expect many utilities to test blockchain,” said Stuart Ravens, principal research analyst at Navigant Research. “However, the most promising area for blockchain is in P2P trading, where owners of distributed generation can sell their excess generation to whomever they wish.”
Stakeholders Likely Early Adopters
The early adopters of blockchain technology are not likely to be utilities, but other stakeholders, such as owners of distributed energy resources and startups looking to sell to them directly.
The report explores the requirements of an energy blockchain and offers practical recommendations to the industry.