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China is planning to explore blockchain technology in order to ease electricity trading

30-Aug-2022 By: Rohit Tripathi
China is planning to

The China Energy Administration (CEA) plans to look into using blockchain-based power trading platforms to improve energy exchange between self-contained power-producing units and state and national networks.

Notably, according to a policy paper published on August 25, the CEA, a state organisation under the National Development and Reform Commission (NDRC) responsible for drafting energy policy, says the policy will investigate the viability of small and medium-sized power generating and storage plants that would serve local communities.

The ECA stated: “The Leading Group for Comprehensively Deepening Reform and Promoting Functional Transformation of the National Energy Administration deliberated and adopted the Plan for Deepening the Reform of "Decentralization, Management, and Services" and Optimizing the Division of Key Tasks in the Business Environment in 2022.”

Blockchain tech used for power metering

According to the Institute of Electrical and Electronics Engineers (IEEE), the immutability of blockchain technology may provide transparent and trustworthy electricity metering as well as transaction proof.

In July, the Yunnan province awarded a contract to a Chinese software company called Insigma Hengtian Software to create a blockchain-based power trading system.

The province of Yunnan has an abundance of hydropower resources and various minor hydropower plants scattered around the province. Prior to China's crypto ban, Bitcoin miners were attracted to the province because of its ample energy supply and attractive pricing structure.

Sichuan power shortage

It's also worth noting that the recent heat wave and drought have already had a severe impact on China's ability to produce and provide power.

In the last several weeks, the province of Sichuan has been facing substantial power shortages, resulting in extensive power outages in both industrial and residential regions.

One of the primary reasons is that the drought has drained local reservoirs, resulting in a more than 50% reduction in hydropower, the region's principal source of electricity generating.

What are your thoughts on China's energy administration plan to deploy blockchain-based power trading platforms for improving the energy exchange between self-contained power-producing units as well as state and national networks? Should other countries consider this move?

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