Reiner Lemoine Institute has been funded by the German Ministry of Economic Affairs and Energy to carry out a three-year research project based on executing blockchain technology in power trading. The project began in January, and it is termed BEST, a German acronym for Blockchain-based decentralized energy market management and design structures.
Other key players in this project include fortiss GmbH, the utility e-regio, OLI Systems GmbH, and the Fraunhofer Institute FOKUS. Germany is one of the committed nations in pushing energy transition to help switch from fossil fuel usage to renewable energy. Energy conventional sources can allow utilities to purchase and sell power on the market and shut-down or start-up power facilities so as to adjust as per demand.
Renewables such as solar or wind cannot be forecasted; hence not easily adjustable to demand within a short period. This can lead to a significant imbalance between power supply and demand. For the industry to handle this issue, electricity has to be traded locally. The BEST project has tried to address this issue as it has developed a power market provider system (SMBS) that help the trading of local power. As a result, bottlenecks and surpluses are able to balance one another in real-time. SMBS development has to consider factors like its fitment with the current power law and maximum auction mechanism.
The project’s software will be examined virtually in the prototype phase, and then a lab simulation linking producers and consumers to a real technical system. The last six months of the project will be used to carry out a trial in actual conditions by power supplier e-regio, near Bonn.
One of the main benefits of blockchain implementation in energy trading is that every transaction is allocated a particular signature. The signature then forms a decentralized system over time that does not depend on any entity. Norman Pieniak, BEST project manager, said that blockchain is also vital to energy transition as it allows power to be traded between producers and consumers. He added that the whole energy system reaps some benefits from this trading since it is flexible and able to react faster to fluctuations.
More and more efforts are being put towards energy transition and addressing the issue of demand and supply imbalance. Energy transition will help the government fight against climate change and reduce greenhouse gas emissions. Germany’s federal energy agency DENA is in the process of developing a digital registry for DERs (Distributed Energy Resources) with Energy Web.https://minernews.io/