California public power utility Silicon Valley Power and Power Ledger have successfully completed the first stage of a program to test the use of blockchain technology for tracking and monetizing carbon dioxide reduction credits for electric vehicle charging and now plan to proceed to the second phase of the project.
Last September, Silicon Valley Power used Power Ledger’s blockchain-backed platform to track and manage Low Carbon Fuel Standard (LCFS) credits at the Tasman Drive parking garage in Santa Clara, Calif., which has a 370 kW solar system and 49 electric vehicle charging stations.
The LCFS program is administered by the California Air Resources Board and is designed to provide incentives, in the form of credits, to reduce greenhouse gas emissions from transportation fuels.
California’s LCFS credits have grown into a $2.1 billion annual market with almost $700 million of that total directly tied to charging electric vehicles.
The aim of Silicon Valley Power’s program is to find a way to more efficiently track and report those credits. Manually collecting that information is a laborious process that can take months to validate, according to Jemma Green, chairman of Power Ledger.
Blockchain is a digital list of encrypted records that cannot be modified and are managed by a cluster of computers rather than a single entity. The technology is used in cryptocurrencies such as Bitcoin, but is also being deployed in a variety of industries, including banking, and internet security.
Instead of using a manual process, Silicon Valley Power’s pilot program records the solar output and the charging of electric vehicles at the parking garage as smart contracts on Power Ledger’s blockchain platform that can then be turned into a digital LCFS certificate.
“We are trying to streamline the reporting chain,” John Roukema, a consultant at Silicon Valley Power, said. The utility anticipates it will monetize $2.4 million in LCFS credits in its next fiscal year to be used to fund programs that could expand public charging stations.
In the just-completed first step of the program, “we were proving the technology, the connections with the meters, proving that our logic works,” Roukema said. “That has successfully been completed.”
In the next phase, Silicon Valley Power and Power Ledger will enter discussions regarding a pilot of commercial deployment of the technology. Roukema also points out that the utility will still need approval of the Santa Clara City Council before it can launch a full fledged pilot program.
Silicon Valley Power is also in discussions with the California Air Resources Board, which would have to accept the validity of the digital LCFS certificates and the blockchain process used to create them.
Large companies, such as Bosch and Honda, are also exploring the use of blockchain technology to track electric vehicle charging. And in California, EMotorWerks is using blockchain to track electric vehicle charging transactions and exchange payments between drivers.
“If our concept is successful in the pilot and in demonstrating the technology, it is something we could share with other public power utilities and with our customers who provide public charging,” Roukema said. “I think there is a whole lot of potential for streamlining the process so that it works for all the stakeholders,” he said.
