China is looking to use blockchain tech for energy trading

A policy document from Friday reveals that the China Energy Administration (CEA) has decided to explore blockchain-powered trading platforms to facilitate power or electricity trading between self-contained power units and the state and national grids.

According to IEEE, or the Institute of Electrical and Electronics Engineers, blockchain technology’s immutable property can offer transparent and trustworthy electricity metering and evidence of transactions.

China to solidify its electrical infrastructure

The new policy in China will look at the possibility of small and medium-sized power generation and storage facilities that serve local neighborhoods trading energy with state and national grids, according to the CEA, a state agency in charge of developing energy policy under the National Development and Reform Commission (NDRC).

The Yunnan province in the southwest of the nation granted a contract to the Chinese software company Insigma Hengtian Software in July for the provision of a blockchain-based electricity trading system.

Small hydropower plants can be found all around Yunnan, which has abundant hydropower resources. Cryptocurrency miners chose the province before China’s crackdown on the sector because of the ample power and cheap costs.

The electrical supply in China has already suffered from severe heat and drought. Sichuan province has been dealing with major power outages recently, with significant industrial and household power outages. One of the main causes is that the drought has dried up local reservoirs and reduced the amount of hydropower in the area by more than half.

The Bank of China recently launched a program that aimed to connect elementary school education with smart contracts. With the new launch, parents will be able to use digital yuan to pay for their kids’ extracurricular and after-school activities.

Notably, China is actively working on its Central Bank Digital Currency (CBDC) and recently commenced the next phase of e-CNY’s testing. The use of digital currency is now expanded to pay for transportation costs.