Microgrids and Blockchain

A revolution in energy generation is happening. The days when millions of people’s electricity needs were met by a handful of large coal, nuclear and gas-fired power stations are waning.

People are increasingly installing solar panels on their rooftops or investing in other renewable energy devices. 

But something else is happening to the grid as energy generation changes – the rise of microgrids. These smaller grid systems are linked to localised power sources, often referred to as “distributed generation” sources. For example, a handful of buildings in a city with their own solar panels might be connected to nearby residences.

In areas that don’t have any connection at all to their national grid, installing solar panels and a battery can be an easy way to bring a basic amount of electricity to a village, for example. This is often initially used for lighting and the charging of mobile phones – ubiquitous in Africa.

These microgrids face a daunting prospect, though. One day, an expanding national grid will want to connect up these self-powering villages. But what will the microgrid operators do then? Will their customers simply be poached?

Instead, it might be possible to use accounting software such as distributed ledgers to keep track of what electricity residents are consuming, and from where. That way, the operators of the national grid and the microgrid can be paid accordingly.

If blockchain or some similar technology could provide that accounting system, it could turn the national grid from being the enemy of microgrids in a lot of places to being their friend.

If providers used distributed ledgers that they alone had access to for their batch of customers – a “permissioned blockchain” – then holding such data might be cheaper and easier. Essentially as a switching customer, apart from it being a really smooth process you won’t necessarily notice the difference.

Blockchains could allow grid operators to have a more informed overview of the resources they manage. An operator might need to reduce the supply on the grid for a few hours, for example. But asking a power station to turn down their supply will cost them money. 

Intelligence like that could one day be available via a blockchain. There’s a lot of buzz around distributed ledgers at the moment, but those championing their use in the energy sector say they are an ideal solution to a genuine problem. That is, the shared nature of energy resources and the difficulty of tracking the large volume of transactions – from energy supply and demand, to actual sales.

Whatever underlying system we come up with to manage the grids of the future, it will have to be efficient and adaptive. The story of how energy generation has evolved in recent years already demonstrates why: it's clearly what people want – and it’s probably how we’ll go greener, too.

(the text excerpted and adapted from text on 
https://www.wired.co.uk/article/microgrids-wired-energy)