The development of distributed energy requires a new approach to energy trading


The energy market and the entire energy system is based on large institutional players, those who are supplying and distributing it. Energy production is still based on utilising fossil fuels, which cause pollution, health problems and climate change. Alternative generators are not able to represent their interest on an equal footing with the big players. There was no way to change this situation on the market – until the idea of distributed energy resources.

About the distributed energy

The benefits of distributed energy are significant. Firstly, thanks to the production of energy close to the consumers, it is possible to avoid building expensive infrastructure. The more is produced and consumed locally, the less are the energy losses and, consequently, costs for the system.

Secondly, distributed energy allows the use of local energy resources, which would be uneconomic to use in other conditions. Waste energy streams from technological processes, which are available only at certain moments in the technological process, are hard to utilise effectively. They cannot be re-used for centralised generation, but they are an ideal solution for such situations.

Moreover, distributed energy solves the problem of enabling smaller players to participate in the exchange. For the authorisation of the transaction it is necessary to have a third party involved as the central unit assuring the validity of the process. In the traditional system it is executed manually and takes a lot of time to perform a sale and purchase agreement. The technical solution to this problem, which has recently become increasingly popular, is the use of blockchain.

About the blockchain technology

Blockchain is an information technology used so far in the creation of virtual currency, e.g. Bitcoin or Ether. However, it is not its only application. The introduction of blockchain technology automates the process of authorisation. By speeding it up, it is possible to reduce the costs of market functioning and manage freely the excess to energy produced at home or in a small business.

The changes taking place in the energy sector create challenges which the current model of centralised energy is not coping with very well. The production of energy in distributed systems utilises the advantages of new technological solutions, leading at the same time to a more sustainable and accessible energy system.

Read more about the topic in the extensive article for Polish Energy Brief written by Radoslaw Gnutek, Bilfinger Tebodin energy expert. Here is the link to the article.


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