Bitcoin is one of the most revolutionary ideas to come out of the tech world. A whole new form of currency was created from nothing, but people are now using it to buy everything from coffee to electronics.
But the lasting impact of bitcoin may end up being blockchain, the technology that makes the currency work. Blockchain has the potential to integrate renewable energy into the electricity grid in a way that is clean, easy and meaningful to the average energy consumer.
First, a brief primer on blockchain. The technology is complicated, but think of it as a giant ledger that is constantly and instantly updated. Every time anyone buys or sells anything using bitcoin, a record of that transaction goes on the blockchain. That means virtual funds clear instantly leading to a permanent, searchable and anonymous record of every transaction. This eliminates the need for middle parties like transaction clearing houses or credit card companies.
The financial world is already taking advantage of this technology. New companies are sprouting up using blockchain to speed up fund transfers and facilitate banks’ peer-to-peer consumer transactions.
But blockchain isn’t only changing the world of finance. In the future, transactions of anything of value could use blockchain— titles, deeds, music, art and potentially even green energy.
As more renewables come online, they create a tricky problem for grid operators. Since people cannot control how much sun shines or how much wind blows, there’s a constant risk of either too much or too little energy flow. When there’s too little, operators can compensate by firing up hydro or fossil fuel generators where are more reliable. But dealing with too much energy presents a complex challenge.
To solve this challenge, GE is helping create a new type of community in Carros in the South of France. The town residents are some of the world’s first “prosumers”: producer consumers who both create and use energy.
Essentially each house is like its own little power plant, as residents actually produce their own energy. They can either use it, store it or even sell it, helping keep the flow of electricity in the Goldilocks zone (not too little, not too much).
This is all doable because Carros is home to the world’s first smart solar grid: a large scale experiment to integrate renewables into the grid. GE worked with French grid operator Enedis to install solar panels on residential and commercial rooftops, implement demand response technologies and create battery storage across the grid. It is all analyzed by GE’s Distributed Energy Resource Management (DERM) software, which meshes consumption information with forecasts from the grid and weather reports.
This is helping transform Carros into a constellation of microgrids where consumers (or better put, prosumers) can instantly buy and sell electricity from each other depending on their needs. Home owners who are gone during the day can sell their electricity to businesses that need more daytime energy. And when they return home they can buy electricity from local batteries, electric vehicles or from businesses that can flexibly respond to changing energy prices.
A similar approach has been adopted in Australia. Energy startup Power Ledger recently started a trial program around Perth that lets people use blockchain to directly trade energy with one another.
Software will be the key to making this new economy work. Things like DERM enable those transactions while making sure energy flows do not exceed the physical wire capacity.
Blockchain technology will for sure elevate this to a whole new level moving forward. On top of bitcoins, we could exchange “greencoins,” enabling the transfer of energy blocks instantly. Combine smart grids with blockchain and you have the potential for the cheap, clean flow of renewable energy from the grid to homes and from homes to the grid, with all of it transparently.
For right now, this is still a peek into the future. In the future, we’ll all be producing and consuming electricity. And as we’ve seen in Carros, it’s a bright future indeed.