PJM Interconnection, a US regional transmission organization (RTO), is collaborating with blockchain-focused enterprise Energy Web Foundation to create a digital ledger technology (DLT) solution to track wind and solar power as it moves throughout its entire supply chain.
PJM and Energy Web will start a blockchain trial by the end of next year’s first quarter. The technology will be tested for a trading system that matches energy buyers and sellers within PJM’s market, currently the largest one in the US. Specifically, PJM will experiment with blockchain application Energy Web Origin, which enables people to trade the wind and solar renewable energy credits as they generate electricity. The blockchain system will be implemented to track the credits as they move from creating to trading.
Given that blockchain still represents an emerging technology, the current trial is very significant, especially since PJM has the second-largest wholesale electricity market in the world. Blockchain is expected to speed up transactions and reduce their costs.
PJM environmental information services VP Jaclynn Lukach told Bloomberg in an interview:
“Blockchain will give some smaller users the ability to trade. We’re also hoping it will reduce administrative costs.”
PJM operates a grid that covers Washington DC., Pennsylvania, West Virginia, Virginia, and parts of Ohio, Indiana, and Illinois, including Chicago. The company has been trialing blockchain for energy-trading systems for the past year and hopes to cuts costs by implementing the technology. It has partnered with Energy Web through PJM-EIS, which is a wholly owned subsidiary of PJM Connext, itself part of PJM Interconnection.
Energy Web is a non-profit organization co-founded by the Rocky Mountain Institute (RMI). So far, it has worked on a blockchain trading system for smaller markets in the US, Europe, and Asia. RMI senior associate Douglas Miller commented:
“This one’s larger in scope and scale. In a year or so, we hope PJM will want to build it out more.”