Power Ledger, a provider of blockchain P2P energy trading platforms has joined hands with BSES Rajdhani Power Limited (BRPL) in New Delhi, India for a pilot project. The pilot project focuses on the trading of solar power.
Energy distribution has been monopolized in most countries, moreover, this monopoly enjoys legal protection. The historical reason is that energy distribution is seen as a natural monopoly.
Energy production and distribution are capital-intensive endeavours, which raises the entry barrier. This further contributes to the continuation of the monopolies held by the giant energy distribution companies. We all know that monopolies create inefficiencies and in turn, that raises costs.
Technologies such as solar power and blockchain are changing this, though. You can now generate electricity, with the help of solar panels installed on your rooftop and photovoltaic cells.
This doesn’t address the problem of energy distribution monopolies fully, though. Consumers that produce solar energy still need to sell the surplus electricity to the grid managed and operated by the distribution giant holding the monopoly. Blockchain P2P energy trading aims to change that.
By its very design, blockchain encourages decentralization and eliminates intermediaries. Its distributed ledger makes information sharing easier, therefore, blockchain can improve efficiency.
Blockchain has security features like data encryption, digital signature, and consensus algorithms, which protect data against tampering. Smart contracts running on the blockchain are transparent and immutable, therefore, they can improve contract administration.
Experts foresee that blockchain P2P energy trading solutions will deliver many advantages, e.g.:
- Consumers can eliminate middlemen and deal directly and transparently with other consumers that want to buy/sell electricity.
- Blockchain delivers higher efficiency, which reduces the cost for everyone.
The new partnership between Power Ledger and BRPL is a case in point.
The Power Ledger/BRPL partnership
Power Ledger is a blockchain project in the energy marketplace, and the company is headquartered in Perth, Australia. The company utilizes blockchain for energy trading, environmental commodities trading, and renewable asset ownership.
BSES Rajdhani Power Limited (BRPL) is the power distribution utility company in New Delhi, the capital city of India. New Delhi has policies that encourage residents and large communities to install rooftop solar power systems and generate electricity.
So far, the consumers sell the surplus solar power to the grid of BRPL. The pilot project between BRPL and Power Ledger plans to change that. Residents living in gated communities that generate solar power can now trade electricity within the community.
As Amal Sinha, the CEO of BRPL says, the company expects that the pilot project will enable consumers to buy electricity at rates much cheaper than the BRPL rates. BRPL expects to expand the partnership with Power Ledger into areas such as Group Net Metering, Virtual Net Metering, and Electric Vehicle Charging.
Given the impressive push for solar power in India, the pilot project certainly seems to have zeroed in on the right target market. India had set an aggressive solar power target for herself, and the country has met the target 4 years ahead of the schedule! The country has also increased her share of solar power in the total energy basket.
Blockchain P2P energy trading: The considerable potential
Experts around the world are clearly seeing the promise of blockchain P2P energy trading. E.g., United Nations (UN) is bullish on blockchain for its potential in positive climate change action, and its focus is heavily on P2P energy trading. Given this, the BRPL/Power Ledger partnership augurs well!