Blockchain technology, which is already in use in Europe, Australia, the U.S and Thailand, can offer creative solutions for Turkey’s renewable energy sector, co-founder of Foton Energy, Can Arslan, told Anadolu Agency on Monday.
Blockchain technology, which supports the transaction of digital assets in real-time, has become widely used in cryptocurrencies. The technology allows for the efficient and verifiable recording and permanent tracking of transactions between two parties.
Arslan argues that this technology, along with providing a platform for cryptocurrency, can be extended to the renewable sector.
"Blockchain might have a significant effect on lots of industries in the future. But more importantly, it has the potential to change the renewable sector and provide innovative solutions to the renewable energy market," he stressed.
Arslan said that some of these application areas include the tracking of distributed energy resources, mobile charging-discharging (EVs) and peer-to-peer (P2P) energy trading.
"The question of why we might need blockchain in renewable energy in Turkey is that the share of renewables and local sources in Turkey's energy mix has been increasing year-on-year. This share has reached almost 50% in the last couple of years,” he said.
He added that as power consumption grows in Turkey, the pressure on the future financing of renewable energy correspondingly rises. “Up until now, the most sustainable solution has been to make long-term energy contracts between the consumer and renewable energy supplier," he explained.
Nonetheless, he said that with such contracts, the consumer would not be assured that the supplier is providing 100% renewable energy.
"The current market does not allow for consumers and distributed energy resources to become a participant in the market,” he said, adding to do so would require a communication network that includes smart meters.
According to Arslan, this is where blockchain technologies come in by allowing consumers control over where they source their energy through all-accessible data that can be shared.
Samples of where blockchain technology can be applied include distributed energy sources such as solar panels, small natural gas-fueled generators and electric vehicles or small-scale units of power generation that is consumed close to the source. The resource operates locally and is connected to a larger power grid at the distribution level.
-Blockchain provides solution to integrate license-exempt renewable power generation
The share of renewable sources in electricity production in Turkey, which was 32.5% in 2018, is now targeted at 38.8% by 2023.
While Turkey aims to increase the share of renewable sources in its energy mix, Arslan said Turkey's Energy and Natural Resources Ministry plans to end the feed-in tariffs in the Renewable Energy Support Scheme (YEKDEM) by 2020.
He argued that blockchain could provide a solution to how the license-exempt renewable energy sources in Turkey will be integrated into the electricity market after 2020.
The scheme, which started in 2011, supported solar energy plants at a cost of $0.133 per kilowatt-hour, and wind and hydroelectricity plants at $0.73 per kilowatt-hour - costs that are deemed very competitive compared to conventional resource production.
"Through providing a new trading mechanism, blockchain might be a solution to that question. To do that, firstly distributed energy resources should be used in local markets and then transmitted as a signal from distribution lines to transmission lines. It will be useful for Turkey to conduct some studies on these options," he suggested.
- Transition to green energy
Arslan stressed the importance of consumers becoming active participants in the energy sector to move towards a more sustainable system and a healthy transition to green energy.
With this aim, he said the Energy Web Foundation (EWF), the world's largest energy blockchain ecosystem with over 100 energy market participants, has conducted the largest studies on blockchain applications in renewable energy trading.
The global non-profit foundation applies blockchain in the energy sector through its digital infrastructure; Energy Web Chain.
Arslan explained that the EWF has already undertaken inspirational projects in Thailand, the likes of which could also be applied to Turkey.
In September, Thailand's state-owned producer of petroleum and power PTT announced plans to create a renewable energy-trading platform using blockchain technology in collaboration with the EWF. The foundation will set up the trading platform, which will facilitate the buying and selling of renewable energy assets across the ASEAN bloc and with Japan.
The ASEAN bloc has a total of 10 members - Indonesia, Malaysia, Thailand, the Philippines, Singapore, Brunei, Vietnam, Laos, Myanmar and Cambodia.
By Ebru Sengul