US energy distributor PJM Interconnection will use blockchain to track the trading of renewables in one of the country’s largest energy market. Credit: Shahjalal2005.

US-based energy distribution company PJM Interconnection (PJM) is collaborating with the Energy Web Foundation (EWF) to create a digital ledger system using blockchain to track the production, delivery, and sale of renewables in a major US energy market.

The system will locate and match buyers and sellers in the sector who wish to trade clean energy. The pilot programme is expected to begin by the end of the first quarter of 2019. It will track electricity produced from wind and solar plants as it’s produced and will enable smaller firms to break into the energy trading market.

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PJM president of environmental information services (PJM-EIS) Ken Schuyler said in a press release: “We are excited for the opportunity to collaborate with EWF and gain experience with a new technology. Our customers have expressed interest in incorporating blockchain technology into our services, and we look forward to leveraging the technology where it can provide additional benefits.”

Blockchain, a digital ledger system that allows users to form secure contracts without the need for an intermediary, is well-known for its use in the crypto-currency trading market. It can also be applied to money transfers, legal contracts, and industry supply chains, and has the potential to facilitate cheaper and faster transactions in the US energy market.

“Blockchain will give some smaller users the ability to trade. We’re also hoping it will reduce administrative costs.”

PJM-EIS vice-president Jaclynn Lukach said in an interview with Bloomberg: “Blockchain will give some smaller users the ability to trade. We’re also hoping it will reduce administrative costs.”

The company distributes energy across 13 states and the District of Columbia, covering an area of 243,417 square miles from Washington, DC, to Chicago, Illinois. It has a total generating capacity of 178,563MW, reaching 65 million people in the US.

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PJM trades wholesale electricity in megawatt hours (MWh), with 1MWh enough to power around 800 households in the US for one hour.

PJM said it has been studying the use of blockchain to see how it could optimise its energy trading for its national grid.

Blockchain developer EWF has developed systems for smaller markets worldwide.

CEO Hervé Touati said in a press release: “This collaboration between EWF and PJM-EIS is a major milestone for the adoption of advanced digital technologies in the energy sector. We are excited to partner with a leader such as PJM-EIS.”