Blockchain

Blockchain Will Be The Glue Connecting The Future Electric Grid

In the near future, the electric-power grid will likely rely on blockchain to manage its complex … [+] network of transactions.

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Once upon a time, a single electric utility would send electricity in one direction to many customers. But the grid is evolving so that millions of devices will buy and sell, exchange and share electricity, system services, and information instantaneously in a multitude of directions.

U.S. energy labs have begun developing systems that use blockchain to manage those transactions.

“We’ve got a really interesting opportunity here,” said Tony Markel, a researcher at the National Renewable Energy Laboratory. “We see the electricity grid going through a pretty interesting transition, this whole sector going from having a lot of things be controlled from a central perspective, moving out, to having a lot of distributed energy resources and having a lot of—having millions to billions of devices sitting out there on the power grid.

“And we’re going to be in a state where we don’t know what all those things are doing. They may all have different objectives. And, so, I think where we’re headed with trying to understand blockchain, and building the knowledge base around blockchain, is seeing that future state and knowing that we need a way to develop and ensure trust across that entire very complex, highly distributed environment.”

Trust is the key word. Blockchain is associated often these days with cryptocurrencies, which rely on the technology’s capacity for trust, or at least for transparency. The future grid will require a reliable hyper ledger, transparent to multiple parties.

“Blockchain … is a distributed digital record of actions agreed upon and performed by multiple parties,” said Pete Tseronis, the moderator of an NREL panel on the future of blockchain for energy systems. “Don’t confuse it with the whole crypto thing yet, folks. But it provides mathematical proof about the state of data, and it’s commonly associated with cryptocurrencies, but cryptography and consensus mechanisms underpin this. At the end of the day, it’s to build a trusted relationship.”

Southern California Edison is among the utilities keeping a close watch on the government’s experiments with blockchain as their section of the grid changes.

“We’re seeing a lot more complexity, a lot more devices. In fact, it’s kind of exploding, if you really think about it,” said Anthony James, a data scientist and senior engineer with SCE. “Inverters, electric vehicles, connected buildings—data is going to be utilized a lot more, moving from static realms to more real-time applications. And, so, there seems to be a very good, very strong fit, a compelling fit with blockchain worth exploring. Data integrity and trust were the two capabilities that came to mind initially.”

Blockchain may also help manage cyber risk, James added, and that has been one of the initial applications explored by NREL.

“The grid is just changing,” said Dave Benton, an NREL expert in cybersecurity research. “It’s evolving to meet the new demands of new distributed energy. More wind, more solar, more batteries. And we can’t do that journey without knowing how security is going to be impacted and how security is going to need to change to adopt these new technologies. So, in our role at the lab, we need to look at what the grid is going to look like in two to three years and how we’re going to accommodate this. And if a technology like blockchain is that glue or fabric that could help put this all together, that’s absolutely where we want to go.”

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Blockchain will give utilities less control than legacy systems, said Christopher Irwin, a program manager with the U.S. Department of Energy, but it will make the system work better. He compares the transition to the advent of anti-lock braking for automobiles, which gave drivers less control of their brakes, much to their benefit.

“It’s way more complex,” he said of anti-lock braking. “You won’t really be in control of the situation anymore. And you will love the results.

“It’s a perfect metaphor for the grid; we’re making it more complex. We are moving control out from that centralized source, and we are doing it because the performance could not be obtained through any other way,” he said. “Blockchain, of course, figures into that because we need the most efficient mechanism to maintain trust between parties, where we’re never going to trust each other perfectly, but we can figure out a way to make a transaction happen.”

Watch the full discussion:

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