Blockchain adoption needs significant policy shift

14 January 2019 |

The state of Uttar Pradesh is gearing up to apply blockchain technology to the energy sector. In October 2018, UPERC, the state regulator, organized a conference on creation of an eco-system using blockchain technology to explore decentralized energy trading, track RE production and facilitate payment gateways for charging EVs. More recently, the regulator has proposed to allow peer-to-peer power transactions using blockchain technology in its rooftop solar PV regulation, 2019.

Blockchain, a nascent technology most often associated with cryptocurrency, is seen as a new frontier in the energy space. It is a distributed database technology that securely maintains a growing ledger of data transactions and other information among network participants. It is expected to change the way power is traded with new business models for peer-to-peer transactions between distributed power generators and storage facilities on one hand, and EVs and power consumers on the other hand. It can potentially allow power generators to set up dynamic smart contracts in response to ongoing changes in demand-supply and other market factors, creating a dynamic pricing system. The ability to record every asset, transaction and energy flow in a way that is tamper proof, verifiable and accessible to all participants could be transformational.

Internationally, Europe is the most active region for blockchain pilots, with utilities working on EV charging, connected home and wholesale trading and settlement. One of the early successful case studies for use of blockchain technology is the Brooklyn micro-grid project in New York that creates localized energy marketplaces for transacting energy across existing grid infrastructure. In October 2018, WePower, a European blockchain-based RE trading platform in collaboration with the local transmission operator shifted all their energy trading data onto blockchain.

In the Indian context, we believe that the regulatory system needs to change very fundamentally to exploit the potential of blockchain technology. According to the Electricity Act, 2003, no person/ entity is allowed to undertake trading or distribution of power without a license. Also, the Reserve Bank of India (RBI) has barred Indian banks from serving virtual currencies and cryptocurrency exchanges which are considered as the basic transaction entity in blockchain. It is hard to see how blockchain can be adopted in the energy sector unless the regulations are relaxed. For that, we need a consensus amongst policy makers, regulators and other stakeholders on wider reform of the power sector and viable mechanisms for blockchain adoption.


Recent reports

India PV Module Intelligence Brief – Q1 2022   

This report captures quarterly trends in module demand and supply, import and domestic production volumes, supplier market shares, break-up by technol...

Buy Report

India Corporate Renewable Brief | Q1 2022   

Our latest edition of quarterly report provides a detailed regular update on key trends and developments in the C&I renewable market....

Buy Report Download Executive Summary

India Solar Compass Q1 2022   

This report provides a detailed update of all key sector developments and trends in the quarter – capacity addition, leading players, tenders and po...

Buy Report Download Executive Summary

Technical Standards For Balance of Systems In Solar Projects

India’s solar capacity has grown from just 10.5 GW to 52 GW in the last five years and the country has adopted ambitious target of building 280 GW s...

Download

India PV Module Intelligence Brief – Q4 2021   

BRIDGE TO INDIA has released a new quarterly report, India PV Module Intelligence Brief, capturing ongoing demand-supply, pricing, technology and poli...

Buy Report

Solar pumps – waiting to take off   

The government has set a target to install 2 million off-grid and 0.75 million grid connected agricultural solar pumps by FY 2023. However, progress h...

Buy Report Download Executive Summary
Award winnig research
We use cookies to offer you an optimal user experience and collect information on website usage.