P2P Trading of RTPV through Smart Contracts on Blockchain

Blockchain can be regarded as a distributed public ledger with all the committed transactions stored in a list or array of blocks in a chain which grows as new blocks are appended to it continuously. Blockchain is thus a unique system of data management which identifies, tracks, verifies and represents changes (denoted by transactions) across the digitally distributed system. and shares this information with the distributed computers connected to the network. With the associated positive characteristics of decentralization, auditability, resilience, and persistency, blockchains have the potential to optimize energy management processes in almost all stages of the power generation-transmission-distribution value chain. Blockchain is also aiding in providing a structured evolution to increasingly decentralized energy systems all over the world to reduce complexity in implementation and management.

The power sector is among those most spoken about as being vulnerable to disruption by integration with blockchains. The highly centralized market structure and regulatory environment make power a highly suitable sector for the implementation of blockchain technology, because electrons can be exchanged instantly with minimal transaction fees in a decentralized network (e.g. from neighbor to neighbor), while payments can be processed simultaneously. Consumers are turned into active market participants by smart contracts, able to buy and sell their electricity without the intervention of a trusted authority or intermediary. Smart meter solutions can also automatically publish renewable generation data to the blockchain as power is generated, and incentives for carbon reduction or green certificates can be instantly identified and earned instantly. Smart contracts enabled by blockchain, and used in concert with smart meter technology, offer a number of efficient, effective and affordable solutions to help transform the power sector, and may ultimately enable truly transactive energy systems. Blockchain makes a perfect complement to incentivize the increase of RE sources in India's generating mix by defining beneficial use cases such as power trading between RE prosumers. Renewable Energy industry in India is currently undergoing in a double flux where in addition to the transition towards renewable sources, digitalization is increasing the pace of implementation and improving the management and benefit realization of the RE systems.

The booming demand and increased growth of Distributed Energy Resources (DER) such as solar photovoltaic (PV) systems, batteries, microgrids, electric vehicle charging and embedded networks has moved the power balance from central authorities to the edges of the grid, which people govern. Like the centrally controlled power systems of the past, the future of the energy system is being co-created by the prosumers and investors who determine where and when to deploy DER. Demand for digital technologies and declining costs generate more digitally driven energy systems, have increased opportunities for decentralization, have increased consumer input and control, and become less resource-dependent and more technology-dependent. Blockchain is a platform for market making that will help bridge network gaps and make it more flexible and open.

Peer-to-peer (P2P) power trading is a form of Blockchain enabled distributed structure that empowers prosumers (both a power consumer and producer) to trade energy among themselves at commonly agreed and negotiated prices. P2P power trading is implemented by smart contracts which are coded contracts that self-execute when specified conditions are met.

Increased adoption of distributed generation, energy storage, and other smart devices are working in tandem to generate new opportunities and threats for centralized control operations and energy markets. Blockchain provides businesses with a potential route to better navigate these changes by optimizing the use of ever-increasing volumes of energy data and providing organizations and individuals with new ways of transacting and building a trustworthy energy transaction management network without the need for a central authority. In recent years, the installation of decentralized energy systems, mainly solar photovoltaics, has been the most cost-effective solution to rising energy access rates.

India Smart Grid Forum (ISGF) has been awarded a project earlier this year by Uttar Pradesh Power Corporation Ltd. (UPPCL) in partnership with Power Ledger, Australia, as Uttar Pradesh Electricity Regulatory Commission (UPERC) has released ground-breaking regulations to enable peer-to-peer (P2P) trading in Uttar Pradesh, India. By allowing P2P trading between rooftop solar owners and neighboring households, these regulations facilitate community net metering. This move will serve as a demonstration of the feasibility and efficacy of blockchain as a technology that helps with recent changes to RTPV regulations.