Since the early 1990s, blockchain has been used as a way to secure digital documents without relying on third parties. The use cases of the first-generation blockchains were mainly about making small payments and earning rewards in video games. But in 2015, with the introduction of the smart contract blockchain platform, its role across industries expanded significantly. 

This January in India, Karnataka Electricity Regulatory Commission released a draft regulation for public comment, enabling peer-to-peer energy trading using blockchain technology. With these regulations in place, Karnataka will become the third Indian state, after Uttar Pradesh and Delhi, to allow peer-to-peer trading of electricity. These regulations mark a key step towards a decentralised energy future backed by blockchain technology. Blockchain is on its way to becoming a vital component for leading the shift towards decentralised energy generation and consumption. ‍

The power of third-generation blockchain

As sustainability becomes a prominent global theme, the early generations of blockchains, where transactions have high transaction fees and slower confirmation times, are often criticised for not being efficient, and lacking much-needed scalability. Additionally, the ‘proof of work' consensus mechanism, which supports early generations of blockchain, consumes substantially more energy than proof-of-stake blockchains. 

The third-generation blockchains like Solana and Powerledger offer breakthroughs with the ability to handle tens of thousands of transactions in comparison with earlier generations of blockchains, at much less energy and cost per transaction. Powerledger's public blockchain based on Solana project, is an open network with proof-of-stake and proof-of-history consensus mechanism, boasts extremely low transaction fees, high energy efficiency. Being capable of processing tens of thousands of transactions per second, it becomes a key underlying technology that supports our platform.

Applications of Powerledger's blockchain in peer-to-peer (P2P) energy trading

Transaction Record-keeping for transparency
Due to the decentralised nature of peer-to-peer energy trading, it is increasingly important to ensure that the record-keeping is done in a manner that is both public and immutable. Each and every transaction facilitated through Powerledger’s solution is written to the blockchain. 
Each record contains the blockchain transaction ID, the buyer’s public wallet ID, the transacted amount, the price per kwh and finally the total amount transacted. This means that all stakeholders can view each and every transaction with the assurance that the records are unaltered and immutable, establishing trust in p2p energy trading markets. 

‍Enhanced PPA visibility with smart contracts
Powerledger's blockchain enables users to send customised Power Purchase Agreement (PPA) offers to each other. These customisations can be based on  the buyer, seller, price, and duration. The blockchain ensures these contracts are recorded immutably, making it easier to track and creating enhanced visibility of PPAs within energy communities.

Dynamic price-capture and data accuracy
With our energy trading platform, users can set their own buying and selling prices for peer-to-peer trading within their community. These price settings are recorded on the blockchain alongside each user's wallet ID. This means that user-induced changes in price are accurately captured within the transaction records, ensuring the data is free of inconsistencies. 

What makes blockchain a crucial element in energy trading? 

Support Decentralisation

• Blockchain facilitates peer-to-peer energy trading without the need for centralised intermediaries, allowing consumers and prosumers to directly transact with one another.
• Decentralisation reduces reliance on centralised utilities and empowers individuals to participate in the energy market, leading to greater energy independence and resilience.

Greater accuracy
By leveraging blockchain, smart contracts can be used to automate energy trading and settlement processes, reducing the need for manual intervention and increasing efficiency.

‍Reduce risk of errors and fraud
Cybersecurity threats pose a significant challenge in today’s interconnected energy systems. Blockchain's decentralised, tamper-proof record of transactions can reduce the risk of security breaches and fraud. Blockchain’s distributed architecture ensures that transaction records are replicated and synchronised across multiple nodes, making it extremely difficult for malicious actors to alter or manipulate data. This provides greater security for all parties involved, reducing the risk of financial and reputational losses.

‍Lower operational costs
By streamlining energy transactions and reducing administrative overhead, blockchain-powered P2P trading enhances efficiency and lowers operational costs for both energy providers and consumers. 

‍Scalability for large energy transactions
Powerledger’s third generation blockchain boasts high scalability with an ability to handle tens of thousands of energy transactions per seconds which makes it suitable to handle P2P transactions of large energy communities. 

Future developments

Beyond the current applications in energy trading and tracing, our plan to extend our blockchain capabilities to new heights.

Integrating detailed meter asset data
Our blockchain is aimed at enhancing transparency and accountability within the energy trading ecosystem. As a part of future development, Powerledger Blockchain will integrate detailed meter-specific information for each user. This includes essential details such as meter serial number, precise location coordinates (latitude and longitude), asset type, generation type (fuel type), and generation category. 

Integrating this meter-related data with transaction records offers users a comprehensive view of their meter asset data, facilitating better understanding and analysis of transactions recorded on the blockchain. This comprehensive view helps in verifying transactions, making them suitable for energy audits. 

‍Granular pricing data for better clarity
Through the blockchain granular pricing data can be recorded for better clarity and transparency of PPAs:

Transparent PPA history is achieved by recording the price offered to a buyer when sending a Power Purchase Agreement (PPA) offer, thus fostering transparency and creating a historical record of all PPA contracts.

Insight into accepted PPA price is gained by observing the price accepted by a buyer upon accepting the PPA contract, providing valuable insights into transaction profiles and enhancing overall transparency.

‍Transaction timeline clarity is ensured by documenting the time of both PPA contract offer and acceptance, offering a comprehensive overview of transaction timelines and further improving transparency and clarity in energy transactions.

Conclusion

With the rapid growth of renewable assets, the energy landscape is moving from centralised to distributed ones. Powerledger’s blockchain-backed energy trading platform enables energy communities to achieve enhanced transparency and accountability in peer-to-peer energy trading. Through detailed transaction record-keeping and smart contract functionalities, participants can track and verify every aspect of their energy transactions, fostering trust and confidence in the market. 

Ready to experience the transparency and efficiency of Powerledger's blockchain-backed energy trading platform? Book a demo.

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