Page 18 - April 2018 Disruption Report Flip Book

ELECTRIC UTILITY SECTOR JAANPURAIRLY20210818
2. Grid operators could use blockchain at both the wholesale level and at the local level to bypass energy aggregators that aggregate DERs, such as smart appliances, residential solar, and battery storage. Ponton Enerchain is developing a wholesale energy trading platform with participation from a number of firms, including Enel, E.ON and Iberdrola.
With more DERs, grid operators face issues managing and trusting data from numerous DERs. An aggregator’s role is to manage retail customers and act as the middleman for grid operators. With blockchain, as the data are verified on the blockchain and is immutable, grid operators can trust the data. With blockchain’s supposedly immutable record, customers can also see how their devices were used and compensated within the grid.
3. At an even more local level, blockchain could enable peer-to-peer energy trading. Some industrial parks in China are already experimenting with this. New York is also at the forefront of this development through its ‘Reforming the Energy Vision’ (REV) regulation, where
one aspect involves utilities becoming a platform provider for DERs to trade on. One of
New York’s ex-public utility commissioners pointed out that blockchain could facilitate REV. ANew York utility, ConEd, is currently coming up with ways to price the value of particular generating and demand response resources down to the micro level. Another company, LO3, is conducting an experiment in both Brooklyn and Australia using blockchain as a basis for local electricity trading...
Business Models to Change
The use of blockchain is likely to lead to a change in business models, subsequently leading to the creative destruction of certain sectors. Utilities, for example, could become distribution service platform providers for DERs, as New York State is already envisioning; technology companies could provide energy network optimizing software or even operate platforms; energy companies that transition to providing services could become asset- light, as they would be able to control how energy is routed and optimized; third-parties or homeowners would become energy providers through DERs; and car companies could become service and energy providers. For the utility sector, generally, the impact from blockchain looks to be mostly negative. If blockchain technology can be used to efficiently provide price signals to facilitate the trading of electricity at the microgrid level then we think it is a potential negative for utilities.
• Peak load can flatten as individual users have the right price signals to vary their consumption and utilize storage. This flattening of peak load will reduce the profitability of utility investments by undermining peak pricing at peak use hours; hence it would reduce the magnitude of investments in the grid, effectively slowing utility growth.
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