The energy industry in a Southeast Asian city-state is being reshaped by blockchain technology which is the underlying technology behind the production and functioning of bitcoin.
The technology has been recommended by experts to be suitable to be used in a number of sectors and countries.
In the city state of Singapore, firms are allowed to purchase and sell what is known as the renewable energy certificates (RECs) which are single units of green energy production from producers of wind, solar power, etc. The main concept behind this scheme is to allow companies wanting to offset their non-green energy production make purchase of RECs from such forms that have excess of clean energy with them.
This system is similar to those used in carbon trading for business in a number of countries. The local administration in Singapore last week announced that companies can participate in trading of their REC on a blockchain-powered system.
And according to utilities provider SP Group, that launched the new platform, that's more than just a gimmick. This new system would create a much better transparency and reduce costs of trading in power because of the elimination of the need for creating a centralized organization to ratify the transactions. The utility company has said that this project can eventually also be used for facilitating cross-border energy credit trading.
"A consumer in Singapore who wishes to buy green energy can now, through blockchain-powered REC trading, purchase a REC from a hydro-producer based in Laos," SP Group CEO Wong Kim Yin told during a television interview talking about the project at the Singapore International Energy Week conference last week. "This reduces the cost, reduces the friction in the market."
The trading volumes of RECs in Singapore have been low because of the increased costs in the process of verification of the certificates and the costs and challenges involved in tracking RECs. Moreover, most of the REC transactions takes place directly between one originator and buyer and not done on a marketplace.
These challenges can be addressed by adding blockchain to the equation. Blockchian is also described as a distributed ledger system which is useful in eliminating the process of verification by a central agency which has the impact of reduction of costs and which thereby encourages smaller energy producing and consuming firms to participate.
The concept of a blockchain driven future of energy trading with greater decentralization, and with more sustainable energy choices for consumers was described by Wong.
"In the past, you have big power stations in the centralized model and you would transmit power to the households. In the future you would have solar panels and you would have batteries. In that model the power system would be a lot more robust," Wong said.
In the city-state, land constraints limit the options for green energy which means that it is not possible to develop large-scale wind farms. Solar panels, which are installed on surfaces, are also a function of land area, as well as the residential and commercial build-up.
The spatial constraints of land could also be eliminated by modern and innovative concepts such as floating solar energy panels on reservoirs – something that is being carried test out in Singapore. However questions about the potential of such technology are also being raised.
(Source:www.cnbc.com)
The technology has been recommended by experts to be suitable to be used in a number of sectors and countries.
In the city state of Singapore, firms are allowed to purchase and sell what is known as the renewable energy certificates (RECs) which are single units of green energy production from producers of wind, solar power, etc. The main concept behind this scheme is to allow companies wanting to offset their non-green energy production make purchase of RECs from such forms that have excess of clean energy with them.
This system is similar to those used in carbon trading for business in a number of countries. The local administration in Singapore last week announced that companies can participate in trading of their REC on a blockchain-powered system.
And according to utilities provider SP Group, that launched the new platform, that's more than just a gimmick. This new system would create a much better transparency and reduce costs of trading in power because of the elimination of the need for creating a centralized organization to ratify the transactions. The utility company has said that this project can eventually also be used for facilitating cross-border energy credit trading.
"A consumer in Singapore who wishes to buy green energy can now, through blockchain-powered REC trading, purchase a REC from a hydro-producer based in Laos," SP Group CEO Wong Kim Yin told during a television interview talking about the project at the Singapore International Energy Week conference last week. "This reduces the cost, reduces the friction in the market."
The trading volumes of RECs in Singapore have been low because of the increased costs in the process of verification of the certificates and the costs and challenges involved in tracking RECs. Moreover, most of the REC transactions takes place directly between one originator and buyer and not done on a marketplace.
These challenges can be addressed by adding blockchain to the equation. Blockchian is also described as a distributed ledger system which is useful in eliminating the process of verification by a central agency which has the impact of reduction of costs and which thereby encourages smaller energy producing and consuming firms to participate.
The concept of a blockchain driven future of energy trading with greater decentralization, and with more sustainable energy choices for consumers was described by Wong.
"In the past, you have big power stations in the centralized model and you would transmit power to the households. In the future you would have solar panels and you would have batteries. In that model the power system would be a lot more robust," Wong said.
In the city-state, land constraints limit the options for green energy which means that it is not possible to develop large-scale wind farms. Solar panels, which are installed on surfaces, are also a function of land area, as well as the residential and commercial build-up.
The spatial constraints of land could also be eliminated by modern and innovative concepts such as floating solar energy panels on reservoirs – something that is being carried test out in Singapore. However questions about the potential of such technology are also being raised.
(Source:www.cnbc.com)
