How Blockchain Can Benefit the Energy Industry
Blockchain continues to be explored for its ability to improve efficiencies in the energy industry. Various startups, utilities, renewable generators, wholesale traders and suppliers are working together to discover what energy-related transactions can be optimized and expedited by blockchain technology.
Blockchain removes the middle man that often slows down everyday processes. For example, if you’re paying an employee, the employee must first submit a timesheet, it must be approved by a manager, then it must be processed by your company’s payroll, and so forth. Blockchain could enable an immediate transaction without the additional red tape.
What are some other benefits?
- Greater transparency
- Enhanced security
- Improved traceability
- Increased efficiency and speed
- Reduced costs
- Potential to reduce risk
*If you’re just learning about blockchain for the first time, check out our Blockchain 101 blog post.
Ways Blockchain Can Be Used in Energy
There are several areas of the energy industry that could be improved upon with the integration of blockchain into processes. In this blog post, we will explore its role in improving visibility in sustainability.
Track Renewable Energy Certificates (RECs)
Purchasing RECs is a simple way to support your company’s environmental goals and make an environmental claim about a reduction in greenhouse gases associated with your electricity use. When a renewable energy source generates power, it then generates a REC. Each REC represents the positive environmental attributes of one megawatt hour (MWh) of electricity generated by a renewable power plant and is retired on behalf of customers wishing to promote their environmental commitment.
Constellation’s team of innovators has noticed an opportunity to improve the tracking of RECs. The team has identified blockchain technology as a mechanism for doing so and is currently testing the application of the technology in a pilot project. Blockchain technology can be used to record the origin of the REC, where it’s being traded and when it’s retired.
“Why is this important? Many corporations with sustainable goals want to ensure that they are meeting their targets, and to show that their renewable generation projects are matching their load,” says John Keefe, a Constellation senior portfolio manager. Blockchain technology can allow RECs to be tracked by anyone at any time, allowing easy peer-to-peer participation.
Offer Sustainability Reporting
Companies increasingly want to be able to point to a specific renewable facility they are receiving their energy from because it presents a more powerful sustainability message for their employees, customers and other stakeholders. Constellation is currently exploring a blockchain-based platform that connects to an organization’s renewable energy assets, offering a complete view of its energy footprint and certifies the asset’s carbon offset.
“Secure, project-specific reporting with blockchain could provide an additional level of assurance that the energy purchased under Constellation’s CORe+ solution can be tracked back to a specific renewable energy asset,” according to Ben Chadwick.
In addition to secure reporting, the blockchain technology could be used to reward renewable energy users based on their carbon impact. Constellation’s team of innovators is in the early stages of finding technology that aligns with its goal of offering customers quality sustainability reporting.
For the latest information regarding energy trends and to stay apprised of what Constellation is doing, subscribe to our email communication at constellation.com/subscribe.