Blockchain technology can incentivize and promote sustainability efforts by creating robust tracking and accountability mechanisms, ultimately contributing to the global goal of reducing carbon emissions.
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According to the IEA, in order to meet the Paris Agreement net-zero targets, electric vehicles (EVs) must comprise more than 60% of all automobiles sold around the world by 2030. Considering the additional impact of other forms of electric vehicles such as large trucks, cargo shipping, and agriculture equipment, the demand on electricity to power these vehicles will be massive. The infrastructure to manage the required energy needs will enable a shared energy exchange among EVs, buildings, and even the power grid itself. Blockchain technology can help manage the energy exchange and reduce costs by eliminating intermediaries, creating automation, and improving grid management.
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Blockchain is a decentralized and distributed digital ledger technology that enables the secure recording, verification, and storage of transactions across multiple computers. Being a decentralized system, blockchain allows multiple participants to maintain and validate the transaction history. This approach enhances transparency and trust in the system. Many know it as the underlying technology behind cryptocurrencies, but its applications extend beyond digital currencies.
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Blockchain technology is a large consumer of energy. It is certainly not an energy efficient solution. The traditional bitcoin-based blockchain uses a Proof-of-Work (PoW) consensus algorithm, which itself consumes a lot of power. Furthermore, energy is wasted by many miners, which strive to complete a PoW challenge but fail to do so.
Active research is ongoing to find alternatives to PoW that may help to reduce energy consumption of the blockchain while not compromising security. One example of how blockchain technology can be deployed in support of energy decarbonization includes management of energy transactions for EVs.
Ferheen Ayaz, a research fellow at the University of Sussex and an IEEE Young Professional, specializes in blockchain solutions for the security and privacy of vehicular networks, particularly message dissemination.
Dr. Ayaz works in energy trading among EVs. She describes the process: “Energy for EVs is sourced from the power grid, or from a building’s solar panels, or even from another electric vehicle, which has some extra energy. In this process, the blockchain can be used as a tamper-proof record of the source of energy, because every transaction cannot be changed easily and therefore we can trust it. When the transaction includes the source of energy—for example, renewables—we can know that we are reducing emissions in the process as well.”
Dr. Ayaz says a secondary use of blockchain is to track carbon emissions. “Blockchain can be used for immutability and for tracking how much emissions are being produced by any source, like an electricity generator or a vehicle,” she adds. Dr. Ayaz has published several IEEE articles and papers on blockchain, including her most recent paper, “Towards Net-Zero Goal Through Altruistic Prosumer Based Energy Trading Among Connected Electric Vehicles,” presented at the x2023 IEEE Vehicular Networking Conference.
In managing energy transactions for EVs, blockchain enables peer-to-peer energy trading, where EVs can directly trade energy with each other or with the grid. By providing a secure system for identifying and authenticating EVs, charging stations, and energy providers, each participant in the network can have a unique cryptographic identity, which enhances security and prevents fraudulent activities.
|Dr. Ayaz says that “as we verify transactions on the blockchain, we need to make sure that these mechanisms are not high energy consuming, such as resource consuming mathematical computations or using complicated machine learning algorithms. We must strive to make the process simpler so that the blockchain can itself consume less energy.”
Dr. Ayaz thinks about how technology can support sustainability efforts. She notes that “when I started working on my recent project at the University of Sussex, it was about energy trading for creating a net-zero community. I began to take an interest in creating net-zero environments and communities, which is when I decided to join the IEEE Young Professionals Climate and Sustainability Task Force. In the near future, as we reduce emissions, we will simultaneously have higher power and energy demands. As a result, we must develop and manage renewable resources to replace fossil fuel. My role in the energy sector and EVs is to understand how we can manage all these efforts in a sustainable manner.”
While blockchain can provide an efficient and transparent system, it cannot directly reduce emissions. However, by creating robust tracking and accountability mechanisms, blockchain technology can incentivize and promote sustainability efforts, ultimately contributing to the global goal of reducing carbon emissions.