Blockchain energy trading project launched in Germany
A state-subsidised project looking at ways to use blockchain technology in adapting energy trading to the burgeoning share of decentralised renewable power generation has been launched in Germany as part of the country's energy transition.
Partners in the three-year project, named BEST (Blockchain-based decentralised energy marker design and management structures), will develop a power market bidding system (SMBS) that will allow automated local balancing of excess energy and grid bottlenecks.
The SMBS will be tested virtually and in a laboratory environment. Then it will undergo a further six months of testing under real-life conditions in the supply area covered by local energy supplier e-regio, west of the city of Bonn.
It will also be developed as open-source software, so anyone can review or reproduce it.
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BEST's main aim is to clarify the tender mechanisms that should be used for SMBS, as well as establishing the role that local grids will have to play and the legal framework that such a system would need.
“Blockchain is interesting for the energy transition because it enables electricity to be traded directly between generating and consuming systems,” said Norman Pieniak, BEST project manager. “The entire energy system benefits from this peer-to-peer trading because it can react much more flexibly to fluctuations.”
"Power trading must be adapted to the energy transition," he added.
An open energy market will incentivise investments in new renewables generation and storage, as well as offering opportunities for older renewable sites that have stopped receiving subsidies under the country's renewable energy law.
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Having a local power trading structure that is open to all is likely to be an incentive for consumers to buy local renewable energy and to incorporate their loads into the trading system. This will come particularly into focus during times when less electricity is going into the grid, Pieniak said.
Several blockchain projects are underway in Germany at present, such as the RegHee project for blockchain-based regional power trading being run by a number of utility providers in Bavaria, the Pebbles local energy trading project from Siemens and Bavarian utility AUEW, and FlexHub. a decentralised flexibility data registry developed by research centre Fraunhofer, where testing of the suitability of blockchain will also be carried out.
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