Block Chain Technology in Power and Energy Sector

Block chain technology is the best way to provide more secured transactions in the  energy and power sector in India and abroad. By Tanmoy Chatterjee

Distributed and smart power grid is the future of energy industries. Utility customers have shown a significant interest to transform into distributed and smart grids but this transformation will take some time with the current infrastructure. Utility customers include residential and commercial sectors. In recent times there is a significant investment on both the smart meters and up gradation of existing grid infrastructure. To bring about this transformation utility companies will have to empower their most important stakeholders i.e. consumers. Utility companies will have to invest both time and money to develop more effective business models. As the grid expands, it becomes more distributed and its performance becomes the most crucial factor to gain the trust of all the stakeholders. Here comes the use of block chain technology which is basically a distributed ledger which helps its stakeholders to become more trustworthy among each other and helps the business to grow.

Block chain technology is the best way to provide more secured transactions in the  energy and power sector in India and abroad. Block chain is the most suitable technology in those business sectors where security is the prime concern. Smart contract technology is the prime component behind the extraordinary secured transactions in the block chain technology. This is the prime reason why banking sector prefers block chain technology in their operations including currency transfer.

Utility industry uses block chain technology for bill payment, charging of electric vehicle, and providing certifications to the panel distributors across the world. In India, especially in Delhi, DISCOMs allow consumers to switch from one discoms to other. To provide these facilities discoms may use block chain technology.

Block chain technology are also used in micro grid operations, Independent Power Producer (IPP) activities, settlement of grid, power and energy trading. Energy and power trading is one of the least explored area where the block chain technology must be used.

Now, the question is when to go for block chain technology?

To find the solution of this question we need to follow a six stage approach for finding the suitability of block chain for any business

• Finding the total numbers of database drivers involved into the business.
• Check the security in the business.
• Check the trustworthiness among the stakeholders.
• Dependencies between the transactions
• Compare the study between security, volume and security.
• Possible regulatory framework and policies

With this five stage approach, block chain based technology can be utilized for various processes in energy sector which includes credit management in energy sector, optimization of assets micro grid payments, operation of smart meters in prepaid mode and to the asset owners involved in distributed generation.

Energy Industry has to find out the possible enhancement of their business after utilizing the block chain technology. Evaluation process becomes the most crucial factor in this process as it helps to prepare the roadmap for adapting the block chain technology. Now to ensure systematic decisions and logical adaptation decisions in energy and power sector has to define utility specific capability levels. There are three stages of capability levels. They are –

• Foundational technology defining
• Viability testing for sustainability in business
• Robustness scalability in business.

In the long run, block chain will add the value to the business models of emerging energy markets. In India, these emerging markets include energy and power trading, operation of virtual power plant and other communities related to energy industry.  The block chain technology will disrupt the Value chain of existing utility companies which will help India’s economy to become more distributive in macroeconomic scale.

About the Author:

Tanmoy Chatterjee is currently pursing PGDM in energy management at NTPC School of Business. Prior joining to this course he worked in IBM India as a team lead of basis module of an SAP ERP project. He had done master of electrical engineering from Jadavpur University, Kolkata. He has two IEEE international conference publications and one Springer journal publication.