Distributed Energy Resources

Walmart seeks patent to use energy-related blockchain

Retail giant Walmart has applied for a patent for a method of managing demand on an electrical grid using blockchain technology and cryptocurrencies.

Blockchain is frequently associated with the cryptocurrencies such as Bitcoin, but they are not synonymous. Blockchain is a digital ledger or distributed ledger that keeps track of transactions without a central database. The technology stores transaction details in blocks, or discrete packets of digital information, that cannot be altered.

Walmart’s patent application calls for a “method and system for managing a demand on an electrical grid” that includes “receiving a capped total amount of cryptocurrency available to purchase units of energy from an energy provider” and “allocating a portion of the cryptocurrency … to each energy consumption device.”

The U.S. Patent and Trademark Office recently released details related to the Walmart application.

“Currently, energy providers deliver energy to locations that inefficiently use the energy, which leads to increased energy costs for consumers,” the application states. “The increased costs result from various appliances and devices that consume energy at higher levels than the appliance or device may actually need to function or perform certain tasks. Smart appliances and devices are now available to consumers that can operate more energy efficiently, but still consume more energy than needed or economically practical.”

Therefore, the application said, there is a need for a method and system “for managing an electrical grid by regulating a demand on the electrical grid.”

Essentially, the technology would put a cap on a device’s energy consumption. Blockchain technology also tracks and records the energy use and available budget of other devices on the network and allows them to share available funds in order to keep a device running. The system is designed to monitor and limit energy consumption. It also identifies which devices on the network use the most energy.

The patent application says it could be used for homes or businesses or anywhere devices can be linked via a computer communication network.

It was unclear from the application if Walmart intends to use the patent internally at its stores or to sell it as a product or service to customers. Requests for comment from Walmart were not returned by press time.

“The need Walmart is solving for is a need many others feel,” Jon Creyts, a managing director at the Rocky Mountain Institute, said. Creyts is also a member of the board of the Energy Web Foundation, an affiliate set up by RMI to facilitate the use of blockchain technology in electric power markets.

Most likely, Walmart wants to manage its own load to see how the technology works, said Creyts, but he also believes the retail giant wants “to sell it.”

Blockchain technology has great potential in terms of transaction speed, security, and costs, said Creyts. By automating the record keeping for transactions, even very small transactions, blockchain technology has the potential to wring a lot of costs out of energy transactions.

It can also be used to track attributes such as renewable energy credits. Among the applications, Creyts said, are utility billing, certificates of origin, demand response, and electric vehicle charging.

“Right now, there is a lot of hype and not a lot of use case clarity,” in the market, Creyts said. But he expects to see more clarity the near term.

The Energy Web Foundation has been showcasing blockchain applications by 12 companies around the world.

In the United States, the foundation is working with Duke Energy, Pacific Gas and Electric and Sempra Energy and is in conversations with a number of other utilities. In 12 to 18 months, the foundation expects to publish its open source blockchain application for energy markets. After that, Creyts expects it will take about two years for blockchain technology to get up to scale in the power market.

Creyts said it might not be long before companies like Amazon or Apple begin marketing energy services to the behind-the-meter market.

Beyond that, Creyts expects to see blockchain applications in the automation of wholesale power markets.

Blockchain technology would enable a bottom up approach to clearing the wholesale power markets, he said. It could take 10 years, but “it is going to dramatically change the way the world operates,” Creyts said.