The most valuable resource in today's society is data/information. To ensure reliable data transport, researchers are looking into cutting-edge technologies that may be used in the long term. The blockchain is an example of such a system. It is a distributed system for storing data and information, providing an extra layer of safety for the programs that use it. Given its useful capabilities, it has great promise for smart grid paradigm implementation.

A smart grid is a system for transmitting energy and data over existing power lines, with the addition of sensors and controllers for instantaneous power generation and distribution. With the use of internet of things (IoT) and cutting-edge sensors, smart grid technology may soon be able to guarantee reliable electrical service. But the largest obstacles in the power supply's data usage and operations for energy consumption are several adoption difficulties in the smart grid, such as privacy concerns and data security. The only way to completely do away with these problems is to develop and implement brand-new and cutting-edge technological solutions. One way to facilitate the smart grid is with the use of blockchain technology.

What is blockchain technology?

Blockchain may be thought of as a chain made up of many blocks, each of which stores some piece of data. This technology's main selling point is that it permanently records all of the iterations of the blocks it generates, making it impossible to delete or alter any of them. Because of this, the blockchain offers a safe way to exchange assets, funds and contracts without any middlemen, such as banks or governments. There are various components that make up a blockchain-based system, including software programs, a database, and linked computers or lodgers. Although the blockchain might be developed using many numbers of languages, many developers are instead focusing on the high-level object-oriented language, Solidity.

Where is blockchain technology being used in smart grids?

The smart grid's many use cases for blockchain technology may be broken down into the following categories:

  • Power generation: Using blockchain, dispatch centers may see the state of a power grid's operations from every angle, in real-time. Profit-optimizing strategies for dispatching can then be developed.
  • Power distribution and transmission: Blockchain technology makes it possible for automation and control centers to adopt decentralized solutions, which have the potential to address some of the key problems with conventional centralized systems.
  • Power consumption: In a manner similar to the production and transmission sides, blockchain might prove useful in this sector by facilitating the exchange of energy between prosumers and various energy storage devices and electric cars.

Implementation of blockchain technology in the power sector

Electrical energy industry issues are being addressed by both new and existing companies using blockchain technology. Here are some examples:

  • Energy Web Foundation: This non-profit organization was established in Argentina in 2017 by a group of prominent figures in the global energy sector with the goal of fostering the widespread adoption of blockchain technology within the energy industry.
  • Grid+: A Texas-based company that facilitates peer-to-peer energy trades between consumers and generators of electrical power with the goal of doing away with middlemen.
  • Greeneum: A peer-to-peer market platform built on the distributed ledger technology blockchain that promises to reimagine the way in which renewable energy systems share vital information with one another.
  • Drift: A company based on peer-to-peer trade of electrical energy, with the goal of cutting out middlemen. Machine learning is used to improve pricing. Since 2014, its headquarters have been in New York City.
  • SolarCoin Foundation: Laying the groundwork for the use of cryptocurrency to incentivize the production of solar energy that has been officially registered and validated.
  • Sun Exchange: Peer-to-peer fundraising company to finance solar PV projects that will provide electricity to South African hospitals, schools and other institutions.

[Discover more about smart grid technology on GlobalSpec]

Obstacles to wider use of blockchain technology in the electricity industry

Blockchains have many wonderful features, but there are also several restrictions that must be taken into account such as:

  • The reduced size of the ledger may compromise the immutability of the blockchain and the data it contains.
  • Even in the absence of third parties, the processing time for a transaction may be longer than typical.
  • High costs result from the desire of nodes to earn larger profits from completing commercial transactions according to the law of supply and demand.
  • After being promoted as 'almost free' in its early years, the blockchain technology's transactions charge is very costly, and the network's performance is not very fast.

Conclusion

A large part of the blockchain's recent success may be attributed to the surging popularity of virtual currencies like Bitcoin. Blockchain technology has attracted a lot of attention and investment because of its numerous useful and novel characteristics. Power grids are beginning highly amazing applications of blockchain technology, similar to other industrial sectors. The technology has the potential to revolutionize the smart grid, but there are still major obstacles that must be overcome in the coming years.

To contact the author of this article, email GlobalSpeceditors@globalspec.com