China planning to investigate blockchain technology for trading electricity
According to a policy statement published recently, the China Energy Administration (CEA) will investigate blockchain-based power trading platforms to simplify electricity trading between self-contained power-producing units and the state and national grids.
The policy will investigate the possibility of small and medium-sized power generation and storage facilities that serve local communities by trading energy with state and national grids, according to the CEA, which is a state agency in charge of developing energy policy under the National Development and Reform Commission (NDRC). To encourage energy exchange between autonomous power-producing units and state and national networks, the China Energy Administration is planning to look into the usage of platforms based on blockchain technology for trading electricity.
In 2022, the Leading Group for Comprehensively Deepening Reform and Promoting Functional Transformation of the National Energy Administration has approved a plan for deepening the reform of "Decentralization, Management, and Services" and optimizing the division of key tasks in the business environment said ECA.
A policy paper released on August 25 by the CEA, in charge of developing energy policy, states that the policy would examine the viability of small and medium-sized power generating and storage facilities serving local communities. According to the Institute of Electrical and Electronics Engineers (IEEE), the immutable property of blockchain technology may enable transparent and trustworthy power metering as well as evidence of transactions.
In the month of September last year, China's National Development and Reform Commission, collaborated with the State Grid Corporation to create a blockchain-based green energy trading platform (NDRC).
China's electrical supply has already suffered from severe heat and drought. Sichuan province has been dealing with major power outages recently, with significant industrial and household power outages. One of the main causes is that the drought has dried up local reservoirs and reduced the amount of hydropower in the area by more than half.
The Yunnan province in the southwest of the country granted a contract to the Chinese software company Insigma Hengtian Software in July for the provision of a blockchain-based electricity trading system. Small hydropower plants can be found all around Yunnan, which has abundant hydropower resources. Bitcoin miners chose the province before China's prohibition because of the abundant electricity and low expenses.
CBW - External Analyst