With the increasing prominence of cryptocurrencies, and the potentially transformative nature of them, many industries are beginning to notice the benefits of the technology that underpins their value, blockchain. As a market leading, innovative business, we have taken the time to explore what these emerging technologies are and what their role could be in the future energy network.
- An explanation of blockchain technology
- Why blockchain technology is increasing in prominence
- How blockchain could simplify existing processes in energy storage
- How the advent of blockchain could allow for new energy storage opportunities
WHAT IS BLOCKCHAIN?
A cyptocurrency is a digital currency that uses cryptography for security and is underpinned by a blockchain to store a ledger of all transactions.Blockhain In simple terms a blockchain is a distributed digital ledger of transactions which constantly grows, as completed, immutable transactions are added to the chain in chronological order.
Its increasing prominence is largely due to its perceived transparency, as instead of being held by a single centralised authority, the authenticity of the record can be verified by the entire network whilst also being unable to be edited or deleted. There are also claims that the lack of any centralised points of vulnerability on a blockchain network automatically makes the network safer as there are no obvious points of attack for potential hackers.
POSSIBILITIES OF BLOCKCHAIN IN ENERGY STORAGE
The possibilities provided by a combination of blockchain technology and energy storage solutions are many, from simplifying existing processes to creating new markets. One example of simplifying an existing process can be seen within the act of arbitrage. In this case, the transparency and immediacy of a blockchain would allow an organisation that has stored energy during low tariff DUoS periods to be able to accurately predict the price they would get for selling a particular amount of energy during a high DUoS tariff period as all previous information could be provided on a blockchain including details such as the tariff prices, quantity of energy and exact time sold.
Perhaps the most exciting potential usage of blockchain technology in energy storage could be its ability to accelerate the transition towards a decentralised energy network that utilises microgrids. With the advent of blockchain technology, microgrids operating independently from the centralised grid become one step closer to an everyday reality due to the transparency and ease of energy transactions that a blockchain would provide.
It could be viewed as an open market where organisations whom have differing energy storage capacities could trade their stored energy on a blockchain. Not only would this allow strain to be taken away from the National Grid as the local network uses its stored energy instead of the grid supply but it would give way to new opportunities, as decisions on the required capacity of energy storage needed could take into account (and transparently observe) other organisations on the blockchain network, the fluctuating cost of energy based on varying DUoS tariff periods in the local area, and whether an organisation wanted to be a buyer or seller on their local network at a given moment in time. This could create a more competitive and responsive network as microgrids compliment each other in order to support the local supply and demand.
In closing, it seems that if cryptocurrencies are currently unstable, as some argue, the technology that underpins them has the ability to provide a level of stability and transparency that has the potential to create new markets across a wide range of industries. The applications of blockchains in relation to energy storage are seemingly too big to ignore and as more research is undertaken and information is gathered surrounding the potential of this still nascent technology the likelihood and viability of microgrids forming the UK’s future energy network gathers mounting momentum and could be a common occurrence in the near future.