If you are interested in applying to GGI's Impact Fellowship, you can access our application link here.
Blockchain is set to transform and leverage the clean energy sector in India and globally which goes beyond the role it plays as an underlying technology for cryptos. Strategic collaborations between private and public institutions complemented by the right policy guidelines and media attention to increase more awareness on the potential benefits of harnessing the power of this backbone technology is critical in today’s day and age.
The paper focuses on why this phenomenon is a golden opportunity for India’s renewable and clean energy, the various forms of blockchain innovation already happening globally, key learnings from the various use cases of blockchain transforming the energy sector and our key recommendations to expedite the process.
1. India’s is missing out on $15 trillion opportunity by delaying its transition towards clean energy
India’s climate action ambition to achieve net-zero emission by 2070 requires strategic supply chain management solutions. The India Energy Outlook 2021, a special report in the IEA's World Energy Outlook series, examines the opportunities and challenges confronting the world's third-largest energy consumer as it attempts to recover from the Covid-19 crisis. Over the next 20 years, India is expected to have the highest increase in energy demand of any country in the world as its economy continues to develop and bring greater prosperity to its citizens.
Today, India's per capita energy consumption is lower than that of most other countries; the country is yet to build a large portion of its GHG inventory. The energy sector is responsible for 40% of India's GHG emissions, with coal being the primary source of total fossil CO2 emissions. The time is now for India to transition to clean energy. The green growth could even add up to $15 trillion to the country’s GDP by 2070.
However, building a truly sustainable energy mix is not that simple.The energy sector is at a critical juncture, transitioning from a centralised, fossil-fueled, and opaque energy system to a decentralised, renewable, and transparent one. Understanding the scope of how we can see this transition happen while adopting sustainable digital technologies to enable a decarbonised and more equitable energy system needs more voice.
India’s current focus, on reviving our energy policy that aims to achieve net-zero emission by 2070, requires strategic supply chain management solutions. In the recent 2022-23 Union Budget announcement, the Indian government's decision to classify grid-scale energy storage as infrastructure has eased the industry that faced financing issues and created more room for innovation. Blockchain, virtual power plants, are few of the innovative emerging technologies to usher in a future energy system that digitalisedized, decentralized and democratized.
1.1 Government of India’s for clean energy transition by 2030
Prime Minister Narendra Modi has committed India to a five-part "Panchamrit" pledge at the ongoing COP26 summit in Glasgow. Four of these are specific 2030 goals:
a) achieving 500GW of non-fossil electricity capacity
b) generating half of all energy requirements from renewables
c) reducing emissions by 1 billion tonnes from now to 2030
d) reducing the emissions intensity of GDP by 45%.
e) achieving net zero emissions by 2070.
India's five commitments are a critical stepping stone on the global path to meeting the ambitious 1.5 degree Celsius global warming target.
1.2 How do we achieve our Net-zero goals?
Given India’s commitment to installing 500GW of energy from renewable energy, it is pertinent to look at measures that suggest how we can actively propagate the renewable energy sources. To do so, we can look at specific global trends followed by many countries to promote the uptake of renewables. One such global trend identified is energy trading through a blockchain-based P2P energy trading platform. Countries like Thailand have incorporated such measures in their Power Development Plan. Several other countries, like Australia, US, France, etc have also conducted pilots and deployed this technology in their mainstream renewable energy propagation plan.
In India, as the penetration of renewable energy is increasing, and with all the states implementing the net-metering policy (making all rooftop solar power generators prosumers), the country’s energy systems face a major challenge to manage the grid. A robust demand management system is needed to integrate renewable energy sources efficiently with our current grid systems. Blockchain can provide a solution to this demand management challenge.
2. Blockchain is the answer India has been looking for the cleaner future
Blockchain is a digital transaction technology that can help decentralise our currently centralised energy, by allowing Peer-2-Peer energy trading through smart contracts in a completely secure and transparent manner. The booming demand and increased growth of Distributed Energy Resources (DER) such as solar photovoltaic (PV) systems, batteries, microgrids, electric vehicle charging and embedded networks have moved the power balance from centralised agencies to the edges of the grid. Blockchain could offer a reliable, low-cost way for financial or operational transactions to be recorded and validated across a distributed network with no central point of authority.
2.1 State of Blockchain in Energy sector
Below are the few blockchain use cases in energy, to highlight how Blockchain can solve India’s emerging demand management challenges due to high volatile distributed renewables energy (DRE) sources.
2.1.1 How can Blockchain be leveraged to solve multi-dimensional problems in the energy sector?
Peer-to-Peer (P2) Energy Trading: It's a blockchain ba<sed platform that allows individuals to trade and buy excess energy from other prosumers. It benefits the masses, as it takes away control from centralized fashion to more decentralized one.
Certificate of origin for RE markets: Blockchain can issue green attributes for every unit of renewable energy produced, track ownership transfer, and stops double counting of carbon credit claims by market participants. This could be highly useful for tracing green hydrogen, especially for sustainable transport.
Renewable Energy Certificates (RECs): The blockchain based platform can also enable trading of RECs, as it is a secure system and has robust traceability. Energy Web Foundation is one such example of the same. It will also reduce the operational costs of RECs and encourage the customer participation for REC trading.
Validating Carbon credit programs: Blockchain can effectively monitor and trace the carbon capture programs like a/reforestation and other conservation projects, to avoid double counting of carbon credits, and monitor effectiveness of such projects.
Battery storage: Blockchain can notify electric vehicles, and other battery storage systems to store excess energy while there is higher energy production through renewable sources (afternoon for solar, and night time for wind) and low consumption, addressing the grid volatility.
EV Charging: The blockchain application can manage vehicles,charging infrastructures and customers using cryptographic identities.
Transactive Energy Systems: Blockchain can balance and control energy grids in the energy market through performing grid communication and control functions for physical assets by responding to temporal and locational price signals.
Government of India’s National Strategy on Blockchain, published by the Ministry of Electronics & Information Technology in 2021, focuses on two major use cases of blockchain in the energy sector -
1. Battery swapping for E-vehicles, and
2. P2P energy trading through smart Power Purchase Agreements (PPAs), smart microgrids, RECs, etc.
2.2 Role of Key stakeholders in propagating use of Blockchain in Energy sector
3. What will it take to implement Blockchain in the energy sector in India at scale?
Suitable Technology Infra: Smart and efficient appliances, from smart communications to smart meters, will have to be available at scale to prosumers, generators and concerned authorities to carry out transactions at non-prohibitive costs.
Change Mindset: India would need a massive shift in mindset starting from being mere consumers to becoming highly engaging prosumers, with increased engagement in energy trading by the people and change in the energy market dynamics. Furthermore, there is a need to build more trust among people regarding the safety of blockchain. As there have been major attacks on bitcoins in the past, and a common man’s misconception of thinking of cryptocurrency and blockchain, will lead to more hesitation among consumers while adopting blockchain technology.
Low cost technology solution: Currently blockchain has achieved the objectives of fast and decentralized, but is still very costly to be deployed at scale. For mass adoption, the cost of the technology has to be brought down.
Training & Capacity Building: India will also need a huge amount of skilled technicians and operational professionals, hence there has to be a key focus on building capacity and training.
Regulation and Policies: National level guidelines and technical standards for blockchain platforms would have to be established. The regulations could also be incorporated at Central Electricity Regulatory Commission (CERC) level.
Revising Business model for utilities: Business models for DISCOMS and utilities will have to be modified keeping blockchain solutions in mind.
Meet The Thought Leaders
Shatakshi Sharma has been a management consultant with BCG and is Co- Founder of Global Governance Initiative with national facilitation of award- Economic Times The Most Promising Women Leader Award, 2021 and Linkedin Top Voice, 2021.
Prior to graduate school at ISB, she was Strategic Advisor with the Government of India where she drove good governance initiatives. She was also felicitated with a National Young Achiever Award for Nation Building. She is a part time blogger on her famous series-MBA in 2 minutes.
Naman Shrivastava is the Co-Founder of Global Governance Initiative. He has previously worked as a Strategy Consultant in the Government of India and is working at the United Nations - Office of Internal Oversight Services. Naman is also a recipient of the prestigious Harry Ratliffe Memorial Prize - awarded by the Fletcher Alumni of Color Executive Board. He has been part of speaking engagements at International forums such as the World Economic Forum, UN South-South Cooperation etc. His experience has been at the intersection of Management Consulting, Political Consulting, and Social entrepreneurship.
Aashi is a mentor at GGI and is currently working as a consultant at Kearney. She exhibits keen interest in the social sector and has gained vivid experiences being a part of Teach for India, Katalyst and BloodConnect Foundation. Aashi pursued her B.Tech from IIT Delhi and was conferred with the prestigious Director’s Gold Medal for her excellent all-rounder performance and leadership skills. Outside of work, you can find her writing poetry Slam, learning French or exploring new places, food, lifestyle and culture.
Meet The Authors (GGI Fellows)
Medha is a seasoned PR and crisis comms specialist with over 8 years of experience in the field managed the same for brands and thought leaders from Infosys, Uber, TikTok /ByteDance, Cuemath, among others. Her journey into public policy comms started at TikTok and she has lead crypto and blockchain related policy comms on behald of WazirX, launching India’s first Crypto Transparency Report, followed by her own show called #HumansOfCrypto. A keen Girl Scout, Medha grew up with a strong belief in creating a positive impact through her school years. Her internships with non-profit organizations such as Action Aid (Kolkata), NAAZ Foundation India Trust (New Delhi), and British Council, Kolkata opened her eyes to harnessing technology for empowerment. A Masters in Applied Sociology from Christ University, followed by a PGDM degree in Advertising Management and Public Relations from MICA, Ahmedabad, further enabled her to identify problems and create action plans to tackle them. She holds a Bsc(Hons) in Human Development from Jadavpur University.
Krati works as a Consultant with the Climate Action Team at Villgro, managing portfolio for the Sustainable Building Material startups. Previously, she has worked with academic research, policy think tanks and implementation organizations, like CARBSE CEPT University, CPR, and SELCO Foundation, trying to find answers on how to integrate energy efficient technology solutions into last mile implementation strategies for development of marginalized communities. Krati is also an ex-fellow of the Urban Fellowship Program at IIHS. Krati is a sustainability enthusiast, trying to find equilibrium between environment vs development challenges.
If you are interested in applying to GGI's Impact Fellowship, you can access our application link here.
UNESCAP: Blockchain’s role in the energy transition: improving renewable energy adoption through distributed solutions https://www.unescap.org/blog/blockchains-role-energy-transition-improving-renewable-energy-adoption-through-distributed#:~:text=Blockchain%2Dbased%20energy%20trading%20solutions&text=As%20a%20result%2C%20anchoring%20energy,asymmetry%20between%20producers%20and%20consumers
Shell Foundation - How can blockchain support the energy transition? https://www.shell.com/energy-and-innovation/digitalisation/news-room/blockchain-building-trust-to-enable-the-energy-transition.html
IFC Using Blockchain to Enable Cleaner, Modern Energy Systems in Emerging Markets https://www.ifc.org/wps/wcm/connect/46ad7055-a5b5-4db0-af78-92fc67a61566/EMCompass-Note-61-Blockchain.pdf?MOD=AJPERES&CVID=mthzuiy
IRENA- Blockchain: A New Tool to Accelerate the Global Energy Transformation- https://www.irena.org/newsroom/articles/2018/Nov/Blockchain-Enabling-The-Internet-of-Electricity
National Strategy on Blockchain, 2021 https://negd.gov.in/sites/default/files/NationalStrategyBCT_%20Jan2021_final_0.pdf