Blockchain is slowly becoming a regular part of our lives. Technology is on the rise with the creation and spread of many cryptocurrencies across the globe. However, the usage of blockchain technology has expanded over the years into other markets as well. One such scenario is the use peer to peer energy trading. Before reading ahead, how about checking out the Top Peer-to-Peer Energy Trading platforms you can find today! All these platforms can help you generate income as a prosumer. Here, the article will focus on the specifics of Blockchain in microgrid energy markets through peer-to-peer trading, including:
- How Blockchain Energy Trading Works?
- Blockchain Energy Efficiency
- Peer-to-peer Energy Trading Benefits
How Blockchain Energy Trading Works?
Blockchain ensures four key principles that can help in energy trading:
- Nodes and Storage are Distributed and Decentralized
- The encryption system is smart, involves consensus, and is asymmetric.
- It intertwines with the information and postal economy.
- All data can be shared easily.
Therefore, Blockchain offers four types of implementation in the energy trading market:
- Trading Platform Construction: IDR-based flexible systems to trade in the energy market can be developed using blockchain technology.
- Transaction Economy: Privacy problems in energy trading can reduce through V2G and LEAGs based trading platforms. This way, P2P energy trading can occur through a secure transaction system.
- Scalability of Trading: Edge-as-a-service framework powered by blockchain can allow fast transactions and a larger network of participants, ensuring maximum scalability in the long term.
- Technological Implementation: Smart contract systems available in different blockchain platforms, such as Ethereum, can use a scalable node system to trade different types of energy options.
In essence, blockchain can integrate the energy internet system that contains all the information technological aspects for energy sharing and exchange to the extremely secure platform of the blockchain transaction system. Blockchain is extremely secure, ensuring that none of the blocks of transactional data can be tampered with without being spotted. Therefore, it makes room for the best energy trading methods, even in the platform’s infancy.
Blockchain Energy Efficiency
First, let us discuss how Blockchain Technology in the energy internet is implemented to understand the efficiency of the method:
- Blockchain removes the chances of information tampering in cases where numerous members are involved in a grand network. No central or third-party system is focused upon to ensure data authenticity. This way, the cost of transactions is reduced, and the flow is improved manifold.
- Energy physical information problem is reduced using blockchain distributed system. The multi-live nature of the system ensures that even if one server fails, the consensus mechanism limit is not exceeded.
- Automatic triggering of tasks through the smart contracts system ensures speed and autonomous control in the system. This way, the intelligent energy needs are met efficiently.
- Chain storage and timestamp system ensure that data processing is reflected in its entirety. None o the data can be tampered with or destroyed. This way, equipment and energy systems can be monitored easily without any chances of any damages.
- Different equipment and market entities present in the energy internet system can be monitored easily using the sophisticated blockchain technology platform. Ensuring effective monitoring without such a sophisticated framework is hard, given how the market behavior can change with time.
- IoT and blockchain smart contracts, collectively, can ensure democratic autonomous management. Execution capability and intelligence level are at their peak through this method, ensuring the best quality of trade between different participants of the energy internet.
- The microgrid allows peer-to-peer transactions that are completely decentralized. This way, even the smallest prosumer can earn from the energy they produce. The flexibility offered by blockchain ensures maximum power trading with minimal costs and losses. The reduced need for a centralized system also drives down costs immensely.
Peer-to-peer Energy Trading Benefits
Before checking out the Top Peer-to-Peer energy trading platforms, consider the following benefits of the system:
- The electricity system is supported by making renewable energy more accessible and easily tradeable for everyone. This way, distributed energy resources can improve, ensuring maximum energy access for everyone.
- The main grid line is supported by localized electricity market systems that match the energy demand locally. Therefore, the main grid is not required to be extended to remote areas. For example, a rural area in a remote location may cause a huge expense to bring the main gridline to the area. On the other hand, peer-to-peer energy trading can use a localized grid network instead of solar panels on houses that can afford them and then trade energy with others. This way, the congestion on the main grid line can decrease manifold as well.
- Another benefit is the idea of a virtual power plant: one where decentralized generators are meeting the requirements of everyone without increasing the costs. It gives an active role to the consumers in promoting the spread of electricity as well.
- Mini-grids have become more accessible. Local energy sources using solar or wind-powered home systems can sell surplus electricity. In essence, a local economy can be developed surrounding the same concept.
- Clean energy becomes more viable. Creating large, centralized solar or wind farms can be expensive and may require a lot of areas. On the other hand, installing them above each home and using each one individually involves a fraction of the costs and separate land requirements. Clean energy can become the norm if peer-to-peer trading is used.
All these ideas are not just theories. Instead, countries in Europe such as the UK, Netherlands, Germany, and Denmark are already gradually implementing the idea. Through this innovation, the systematic empowerment of customers can help digitalization spread to the energy market quickly, ensuring maximum benefits for the generations to come.
With the efficient use of blockchain, peer-to-peer energy trading can become the new norm in global energy production and distribution in the next few decades. Let us know if you love our list of the Top Peer-to-Peer Energy trading platforms in the comments.