Blockchain is poised to turn the promise of renewable energy tracking into a major boon for people who care about the environment, along with utility operators desperate for a competitive edge.
I watched green energy’s future unfold during a demo of the blockchain-based Renewable Energy Certificate (REC) pilot at the recent SAPPHIRE NOW and ASUG Annual Conference. It’s the result of a co-innovation project between SAP and Wipro.
“Blockchain can connect a network of peers from energy generation to distribution ─ electricity producers and consumers ─ through the grid, so neighbors and local companies can simply trade energy with each other using automated tokens,” said Shivanand Hiremath, digital architect at Wipro. “It’s a far more efficient process than selling electrons back to the grid first.”
Benjamin Stoeckhert, blockchain business developer at SAP, added that this system can support new business models such as local renewable energy tariffs and marketplaces.
Let’s say you’re a consumer with electricity to spare. Hop on your utility operator’s website to see which neighbors or even local businesses you can trade your electricity for in exchange for green energy points. Consumers can also see exactly where their electricity is coming from.
Green Energy Tracking Problems Solved
Blockchain-enabled energy tokens are equally beneficial to utility providers. Being able to see and access locally available electricity can help operators more efficiently balance supply and demand. Even more important, in a highly commoditized industry where price rules, blockchain provides utility retailers with differentiation ─ the ability to offer superior green energy certificate services to consumers at a price premium.
Unlike conventional renewable-energy certificates, the pilot, which was built on SAP Cloud Platform Blockchain and integrated with SAP S/4HANA for energy data management, was designed to reduce the risk of double counting renewable energy certificates, as well as lower costs.
“Blockchain provides transparency and accuracy to consumers, utility providers and regulators across the green energy life cycle,” said Stoeckhert. “Utility providers that use the same certificates for regulatory compliance and consumer tracking risk erroneous double counting. They also rely on manual steps and expensive auditing for many processes. Blockchain automates those steps, while providing an immutable chain of record for every certificate and transaction. This eliminates intermediaries, reducing costs and mistakes in counting certificates.”
The dashboard captured real-time energy capacity and availability for retailers. With a clear window into consumer demands, as well as regulatory obligations, retailers could execute more well-informed long-term trading agreements.
New Business Models
If blockchain proponents have their way, use cases like these will significantly disrupt the modern energy grid, especially as businesses orbiting the renewal energy market, like rooftop solar panels and electric-vehicles, emerge. Long-term Stoeckhert envisioned a transactive energy world where homes and buildings have blockchain-enabled software that automatically trades electricity across the energy grid based on real-time pricing.
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