Blockchain Technology in the Indian Power Sector

Access and availability of reliable and affordable electricity to every household is one of the major factors for India’s socio-economic development. The Indian electric utilities are at the cusp of an energy transition with the advent of distributed renewable generation resources which is pushing the system to move from a centralised generation, transmission and distribution to the new era of decentralized systems. As renewables becoming greater percentage in the energy mix, there will be more intermittency in supply and bigger challenge to manage the grid. The flexibility in demand may be achieved through a combination demand management system, and the flexibility in supply may be achieved through energy storage and other fast responsive generation resources such as hydro plants and gas turbines.

India’s energy-consumption growth is currently faster than that of all major economies. In efforts to curb further increases in the use of fossil fuel generation, the Indian Government has set a target of 175 GW of renewable energy capacity by 2022 which comprises of 40 GW of rooftop solar. All the states in India have issued net-metering policies and theoretically every electricity consumer in India can be a prosumer. The faster adoption of decentralised energy resources and the emergence of prosumers have added to the challenges in managing energy systems and carrying out power transactions at the individual user level. The Government of India has set Renewable Power Obligation (RPO) targets for all the electricity distribution companies (Discoms). The RPO target for 2019-20 is 17.5% out of which 7.25% has to be from solar power. While Discoms across the country are struggling to meet the RPO targets, the Uttar Pradesh Electricity Regulatory Commission (UPERC) in their revised solar policy issued in December 2018, mooted the idea of peer-to-peer (P2P) trading of electricity from solar rooftop generation leveraging Blockchain technology. The secure and decentralised nature of blockchain technology is well suited to implement and automate smart contracts for peer-to-peer (P2P) transactions. The smart home appliances connected to an energy trading platform could continuously look for the cheapest and cleanest electricity offer and automatically connect to the new energy provider through smart contracts executed on blockchain. This experience will allow the customers to interact from their home or office directly to energy sellers.

While there are 24+ use cases of blockchain technology in the power sector, the one gaining the most traction at present is P2P power trading, where owners of small-scale generation can sell excess generation directly to other consumers. A blockchain-enabled P2P model allows much greater flexibility and could be a powerful enabler for a customer-centric transactive energy regime. Blockchain-enabled solutions will add to the speed of adoption as it can be expanded for Group Net Metering, Virtual Net Metering, EV Charging and Virtual Power Plant applications.

Uttar Pradesh (UP), the most populous state in India with over 200 million of population, is the first state to have regulatory approval to implement the blockchain-enabled solar power trading. The state owned UP Power Corporation Limited (UPPCL) and UP New and Renewable Energy Development Agency (UPNEDA) have received approval of the UPERC for a P2P trading pilot project using blockchain technology that will cover few government buildings in Lucknow with solar panels on their rooftops. It will involve solar power trading between these buildings, which is expected to be completed in next six months. The pilot project is being implemented by India Smart Grid Forum (ISGF) in partnership with PowerLedger, Australia. The UPPCL and UPNEDA will study the results of the pilot project and examine the feasibility of expanding the system by inviting all customers across the state. They will then submit the results to the UPERC for framing appropriate regulations to promote P2P trading of solar energy in the state.

Also, to support the development of blockchain-based solutions for the energy sector, a lot of organizations are setting-up blockchain labs with the aim of accelerating new blockchain applications such as distributed ledger solutions and its use-cases. If the new applications are successful for mass adoption, it would have profound impacts on the business models of the entire energy sector value chain.

ISGF been a pioneer in spearheading Blockchain technology in India in the power sector and has been conducting workshops and conferences around the topic since 2017. ISGF has also executed memorandum of understanding (MOU) with Energy Web Foundation (EWF), Energy Blockchain Consortium (EBC) and Power Ledger. EWF is a joint venture between Rocky Mountain Institute, a globally reputed think tank in USA and Grid Singularity, a Blockchain technology firm in Germany. EWF has appointed Reena Suri, ISGF Executive Director as one of EWF’s Global Ambassadors. EWF is engaged in developing open standard based blockchain applications for the energy sector.       

| Article published on 25/01/2020 by Moulin

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