Sacramento’s municipal utility will use blockchain software to track rewards for customers who charge with solar power.
The city of Sacramento is preparing to test a hyperlocal electric vehicle charging program that will use a Chicago company’s blockchain software to track customer rewards.
The pilot project will offer blockchain-based “tokens” for charging vehicles when there’s a surplus of solar power on the local grid. The value will fluctuate based on the amount of solar being produced within a specific substation.
The project is a collaboration between the Sacramento Municipal Utility Department and a French utility, Électricité de France. It will use digital ledger software from Chicago’s Omega Grid to track customers’ tokens.
“It’s part of our research and development strategy to engage with new technology providers,” said Denver Hinds, the municipal utility’s research and development manager for smart energy technologies.
If successful, the program could offer a new tool for utilities to manage customers’ distributed energy resources, which might be necessary for California to meet its ambitious goal of becoming carbon neutral by 2045.
The program details were still being finalized, but Hinds said it will be voluntary. Participants will have access to a web-based dashboard and receive notifications by email or text to alert them to upticks in solar generation, said Killian Tobin, CEO and co-founder of Omega Grid.
Customers who plug in vehicles during these periods will be rewarded with blockchain tokens that can be spent at participating merchants. An option to convert tokens to cash is likely, as is the case in Burlington, Vermont, where the municipal utility uses Omega Grid software for a demand response program.
Municipal utilities like Burlington and Sacramento offer Omega Grid an important opportunity to test new types of energy marketplaces, Tobin said. As a municipal utility, SMUD has “more leeway to try new things with their customers,” he said.
Since this marketplace will be implemented at the distribution level, he said, it will be “much more localized” than incentive programs implemented elsewhere at the transmission level. It’s even possible the price could be narrowed down to the neighborhood level.
Utilities increasingly have to adapt to changes on the grid continually and quickly, using flexible technology to defer large upfront investments in infrastructure that lasts decades, Hinds said. As transactions happen more frequently and the utility has to track them over the course of a day rather than a month, new computing methods like blockchain could offer a low-cost way to do that, since it uses distributed rather than central computing resources and requires less human oversight, he said.
While this pilot focuses on solar and electric vehicles, it can help inform similar programs using other distributed energy resources like battery storage.
For Électricité de France, the project benefits the company’s research goals. California has higher distributed energy resource penetration than France, so testing the technology here can help the company prepare for a future when France presumably has more distributed generation, said Arnaud Souille, smart grid program manager at Électricité de France’s California-based Innovation Lab in Palo Alto.
The project could help lay the groundwork for an eventual “transactive energy marketplace,” in which utilities facilitate a constant stream of energy transactions between customers, similar to how Airbnb functions for rental properties.
To build these types of marketplaces on a large scale, regulatory changes will be necessary, especially for public utilities commissions in the United States, Souille said. Working with the Sacramento Municipal Utility Department gives Électricité de France the chance to test the technology for the value it offers utilities and customers.
Once the research team has more knowledge, they can start exploring the regulatory framework needed to implement local marketplaces on a larger scale. “If we prove there is value, and if we prove that a good regulation framework is possible, then probably other utilities, including [investor-owned utilities], could be interested in that,” Souille said.
The pilot will be an important test, participants say. The program is set to run for a year once it launches, likely the end of this year or beginning of next.