US Energy Department Sees Potential In Blockchain-Backed Peer-To-Peer Grid

January 25, 2018 12:34 AM

Governments are continuing to look to blockchain technology as a means to deliver more efficiency, transparency, and a technologically robust infrastructure. The latest endeavor of the US Department of Energy’s (DoE’s) National Renewable Energy Laboratory (NREL), announced on January 23, 2018, is a collaboration with blockchain provider BlockCypher to build a peer-to-peer energy trading network capable of cross-blockchain-compatible transaction settlement.

The initial test of the system will assess how the Dash blockchain handles distributed energy resource-related (DER) transactions. Dylan Cutler is Senior Engineer and Principal Investigator for NREL’s blockchain project. He said that NREL’s desire to enable “a more cost-effective, environmentally-friendly, and efficient electric grid” has led it to a collaboration between government agencies, regulators, and utility providers:

“Blockchain technology presents a transformative and highly-scalable platform for enabling distributed energy markets, which could enable DER to interact more effectively with the larger grid. These interactions include more efficient demand response, capacity reserves, power quality [and] support.”

Karen Hsu, head of growth at BlockCypher, described how the impact of this initiative may deliver relief in times of crisis, help scale energy infrastructure to accommodate growing demand, and help mitigate power fluctuations:

“The technology developed in this project enables people to exchange renewable energy, peer to peer. This would be important in a natural disaster or when the grid goes down for extended periods, just like we’ve seen last year across the U.S. This technology is also important as energy consumption continues to grow with more people using electric vehicles and battery powered devices. Peer to peer energy exchange could improve the match of generation and demand, reducing under voltage or brownouts during peak energy usage.”

The broader aspiration of NREL is interoperability, so while initially piloted with Dash, a blockchain-agnostic approach is favored above all. A helping hand from BlockCypher’s API accomplishes NREL’s goal, providing the infrastructure to utilize various cryptocurrencies on the platform.

In direct correspondence with ETHNews, Cutler elaborated that rapid, low-transaction-cost mechanisms capable of communicating price signals relative to energy assets are an underutilized resource.

Cutler told ETHNews the pilot is will demonstrate “hardware response, and transaction settlement on a blockchain … resulting from an agreed-upon time-series contract between a buyer and seller of energy.”

“The focus of this project is showing technical feasibility which will provide foundation for follow on research and development in the energy/blockchain space, including: scaling up to evaluate impacts on distribution feeders, evaluating market design … and the impacts of these designs on control/power quality/reliability/resiliency, etc.”

This isn’t the DoE’s first foray into integration of blockchain platforms for the energy industry. Beginning January 2017, the DoE established an initiative to leverage blockchain technology for the energy sector. During the following September, it entered into a finance partnership with various entities implementing blockchain, in a bid to enhance the security of power grids.

The development of a peer-to-peer system corresponds with similar endeavors made by industry giants Royal Dutch Shell, Tokyo Electric Power Company, and British Petroleum.

NREL’s endeavor represents the latest step in the DoE’s effort to test applications for blockchain technology, and to see if those use cases will pan out. When the program provides traceable results, it will signify another stride towards the future of energy grids in the United States.

Jeremy Nation is a writer living in Los Angeles with interests in technology, human rights, and cuisine. He is a full time staff writer for ETHNews and holds value in Ether.

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