The Chinese Dragon may seem to have locked horns with cryptocurrency exchanges, but apparently, is quite considerate about harnessing the benefits of blockchain technology. Reportedly, a team of researchers from Fudan University in China has created a blockchain-based exchange to buy and sell unused power across the country.
An energy solution to reduce power wastage, the application created by the researchers is directly linked to a blockchain-based electricity exchange, where energy producers/sellers and distributors/buyers can register to assume the role of nodes in the network. The trade of electricity takes place between these nodes, thus eliminating the role of third-party intermediaries.
The Underlying Technology
For secure, reliable trade and management of power assets, the application is going to be based on two different blockchains, namely IBM’s Hyperledger and Ethereum.
The trade of power on the network takes place in a peer-to-peer fashion, where a buyer can put up a purchase request for power, the application presents the request to a suitable seller through a legally-binding smart contract, and the seller responds to the request. The role of Ethereum smart contracts is to collect the price, volume and few other parameters as per the buyer’s demand, and match it with a seller capable of fulfilling the demand raised. The monetisation model of the blockchain-based application has also been defined by the researchers as the solution will accept cryptocurrency payments.
The Need for Solution
According to Reuters, China has been wasting much renewable energy because of the rising number of renewable energy projects, coupled with the issue of curtailment. While the wind curtailment rate in China is 8.7%, solar curtailment rate in 2018 was found to be 3.6%. At present, China is among the top renewable energy producers, generating 680 GigaWatt, which is equal to 40% of the country’s total energy production.
Researchers believe the blockchain-based solution will prove to be an efficient mechanism for utilising the waste power, as well as recording the details of trade on a permanent basis via blockchain technology.