Japan’s KEPCO is the most recent string of utilities in Asia piloting blockchain to allow solar energy producers to sell on a digital marketplace. A Japanese utility has experimented a blockchain platform for residents to sell excess solar power.
The software grants producers of solar energy to track market prices, and sell at their unused power at competitive rates. Others who don’t produce their own renewable energy would be able to buy this at market rates.
The trial was done at a research lab in Osaka, under a partnership between Kansai Electric Power Company (KEPCO), the second largest utility in Japan, and Australian company Power Ledger. The project is among a host of others that are being run in Asia, with households and businesses able to trade on renewable energy at more affordable rates on a digital marketplace.
The project in Japan was run for five months using data from eight participating electricity meters. If this was enlarged to a larger scale, it would have led to savings of US$18.5bn this year as a result of lower renewable energy prices, according to Power Ledger.
“Power Ledger’s trial with KEPCO established how communities can be given access to cheaper energy systems to offset existing energy costs and allow energy-generating customers to monetise their renewable energy investments by selling their excess energy via Power Ledger’s P2P platform,” Power Ledger’s co-founder and chairman Dr Jemma Green told EnergyInsider.
The blockchain-based model could serve as second option to the current approach used by Japan and others on renewables. At the moment, Japanese utilities must purchase renewables at a fixed price called the “feed-in tariff” and for contract durations set by the government.
But these fees have risen over time as demand has increased and as a result, consumers are paying higher prices for renewable energy. In 2019, Japanese utilities are expected to have paid US$33.2bn in renewables fees, the majority of which – about US$22.7bn – is being passed on to household and business consumers, according to the Nikkei Asian Review.
The feed-in tariff was set up in 2012 to encourage long-term investment in renewable energy. But as the market has advanced, the government will phase out the fixed price in favour of a competitive bidding system for renewable energy in 2020 in a bid to keep costs down.
Power Ledger’s blockchain platform would “cut out the middleman”, Green says. “Power Ledger will provide users access to cheaper energy prices, incentivising more people to fix solar panels and other types of renewable energy generators.”