Blockchain Technology in Solar Energy

Blockchain Technology in Solar Energy

Erginbay Uğurlu, Yusuf Muratoğlu
DOI: 10.4018/978-1-5225-9257-0.ch006
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Two of the important topics concerning scientists and governments are blockchain and climate change. After the paper of Satoshi Nakamoto, blockchains became a global phenomenon. After its usage for cryptocurrencies, blockchain is starting to be used for digital protocols and smart contracts. Blockchain technology is used in many sectors, such as banking, finance, car leasing, entertainment, energy, etc. Climate change leads to global warming, which means the long-term warming of the planet. Therefore, governments have made an effort to decrease global warming or keep it stable. One of the mitigation ways of global warming is to use renewable energy. Solar energy is one of the most used types of renewable energy sources, and also blockchain technology is widely used in this sector. In this chapter, the authors investigate the use of blockchain technology in the solar energy sector.
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Blockchain provides peer-to-peer transaction platforms that use decentralized storage to record all transaction data. Blockchain applications are used in different industries. These industries are digital securities trading industry, digital identity industry, proof of ownership industry, peer-to-peer transactions industry, network infrastructure industry, etc. Based on their stage of development Blockchain applications can be divided into three broad categories namely: “Blockchain 1.0”, “Blockchain 2.0”, “Blockchain 3.0”. The first category comprises cryptocurrencies, the second category represents a digital protocol, and the last category is the stage where the smart contract concept is developed.

Solar energy is one of the renewable energy sources which is essential for sustainable human life and fight against climate change. Solar energy is widely used green energy type which can intelligently integrate the actions of all connected users thus they can both produce and consume electricity using smart-grid technologies. The users, which both produce and consume electricity are called as a “prosumers” Smart-Grid system has some advantages such as improve the robustness of grid, self-healing capability of grid and internality of the grid. Also, a smart-grid system has some characteristics such as; reliability, security, efficiency, deployment and integration of distributed resources, generation demand response and demand-side resources, advanced electricity storage and peak-shaving technologies, etc. Because the countries mitigate environmental degradation; they start to use Smart Grid.

Smart grid systems have different technologies, but mostly centralized technologies have been used in the sector. Blockchain is better than non-decentralized technologies owing to transparent transactions and no single user controls. Compared with traditional methods; using decentralized technology, the distance between generation sites and load centers are decreasing. Moreover decentralized public ledger is a barrier of vulnerabilities of a central store of data. For the solar energy prosumers; it provides a safe and easy way to exchange their energy production.

One of the Blockchain project in smart grid is provided by Belgian Enervalis company and Dutch Eemnes Energie company. Also, there are some projects in UK and USA which use Blockchain technology. For example, LO3 Energy, a young New York company, is working in the Brooklyn Microgrid project. In UK Centrica company aim to make a local energy market using Blockchain technology,

The contributions of the chapter to the book are providing knowledge of Blockchain technology and Blockchain usage in solar energy production. We do not aim to provide information about the logic of the blockchain but aim to focus on blockchain in solar energy production. The first section is an introduction, in the second section fundamentals of smart grid and solar energy are discussed generally. In the third section, the chapter will be focused on blockchain applications in solar energy production smart-grid systems. In the last section of the chapter, the chapter will be summarized.

Key Terms in this Chapter

Microgrid: A group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid.

Cryptocurrency: A type of digital currency that uses cryptography for security and anti-counterfeiting measures.

Renewable Energy: An energy produced from sources that do not deplete or can be replenished within a human's life time, any naturally occurring, theoretically inexhaustible source of energy.

Blockchain: Essentially a distributed database of records or public ledger of all transactions or digital events that have been executed and shared among participating parties. Each transaction in the public ledger is verified by consensus of a majority of the participants in the system.

Smart Contracts: A set of promises, specified in digital form, including protocols within which the parties perform on these promises.

Solar Energy: Any type of energy generated by the sun. Solar energy is created by nuclear fusion that takes place in the sun.

Smart Grid: An electricity network that can intelligently integrate the actions of all users connected to it—generators, consumers, and those that do both—in order to efficiently deliver sustainable, economic, and secure electricity supplies.

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