Blockchain technology is a mechanism for creating trusted data on the Internet. It is well known as a fundamental technology for virtual currency (crypto assets), but its application is expected to spread beyond the financial sector because of its following features:
The application in the power industry is considered the most promising. Research and development are underway around the globe.
The shift to renewable energy sources to curb global warming is accelerating rapidly. The utilization of renewable energy sources has become a must for corporations.
There are many challenges in popularizing renewable energy usage. Ricoh has focused on two challenges related to its distribution.
One difficulty is handling renewable energy. The amount of energy generated by solar and wind power is unstable, and it is difficult for retail electric power companies to procure stable electricity.
The other is a cost associated with proving that the energy comes from a renewable source, an additional overhead not required by other power generators. If the source of renewable energy can be verified by evidence in the blockchain itself, usage will become more widespread because the additional proving costs can be eliminated, thus lowering the prices of renewable energy.
Ricoh believes that blockchain technology may help solves these two challenges. Accordingly, the company has developed a near real-time system that visualizes where renewable energy is generated and used in a way that is verifiable third parties*2. The intent is to ensure the stable procurement of renewable energy by increasing its flexibility and assuring renewability at a low cost. Ricoh aims to establish the system as a platform for trading electricity.
By recording the amount of power generated and consumed in near-real-time, it is possible to visualize current electricity load levels. The ability to visualize load and demand helps stakeholders (including power generators and retail power utilities) coordinate the interchange of electricity among them, making it possible to diversify the risks of using renewable energy. With this functionality, it allows retail power utilities to supply and procure stable renewable energy efficiently.
Power generation and consumption records are recorded and can be verified by a third party without being tampered. The records provide evidence instead of a certificate; the system can potentially reduce the evidence generation costs significantly through complete computerization of the measurement and recording tasks presently being handled by field staff.
With the amount of consumed power visualized, consumers can easily see how much of their power comes from renewable energy sources, such as solar power. For a business consumer, blockchain technology evidence capabilities prove the amount of renewable energy usage is accurate.
As a result, companies that purchase electricity managed by this system will disclose to the community that they are taking the initiative in using renewable energy, thus enhancing their corporate values towards curbing global warming.
Ricoh is developing a system that manages renewable energy. Ricoh's renewable energy system provides retail power utilities and consumers power interchange, evidence generation, and consumption visualization.
The supply of renewable energy tends to be unstable, so there exists a barrier for retail electric power companies who need to purchase a certain volume of electricity in advance. This system provides risk diversification by providing a high-speed power interchange mechanism and a basis for guaranteeing evidence.
When demand rises unexpectedly, a retail power utility can have other utilities provide power from their surplus renewable energy supply. The system is useful for not only the retail power utility that has suffered a supply shortage but also the utilities that have inventory available.
The system allows participant companies to mutually record their renewable energy production and consumption and share evidence. Though primarily intended for retail power utilities, any company involved in the consignment and dissemination of renewable energy can participate; all participants share the same basis for evidence-based assurance.
This new system requires significantly lower infrastructure costs compared to a public blockchain. While a public blockchain is commonly used for crypto currency, it requires a significant cost to verify the authenticity of input data; this new system allows multiple companies to build a blockchain as a consortium with a specified objective. The cost of using renewable energy is significantly reduced if the data recorded in the blockchain can substitute for a certificate. Each participant has its own server, so the management of the entire system is not complicated even when the number of participants increases.
Using renewable energy is a challenge today's companies have in common. Ricoh intends to build a system that helps visualize renewable energy in near-real-time. The purpose is to make renewable energy readily available at reasonable prices to all stakeholders, including power generating companies, retail power utilities, and general consumers.
Ricoh will maximize the effectiveness of blockchain technology, particularly its inherent reliability. Through the resulting information infrastructure, Ricoh continually seeks ways to deliver value to society.