Following the recent news that Japan-based Kyocera and New York-based LO3 Energy are testing the feasibility of a blockchain technology managed virtual power plant (VPP) at Kyocera’s Yokohama Nakayama Office in Kanagawa Prefecture in Japan,

Arkapal Sil, Power Analyst at GlobalData, a leading data and analytics company, offers his view on the significance of this innovation and what it means for the Japanese power market:

“The experimental project is unique and once proved successful it can have a significant impact on the Japanese solar energy market. If the LO3 Energy’s distributed ledger technology can demonstrate effective load management at the project level, it can be scaled up to a parallel energy market in the country, where secured transactions can be carried out through blockchain as an alternative to feed-in tariff (FiT) mechanism.

“A larger market with diverse energy sources will enable efficient load distribution through proper load flow analysis. Furthermore, as micro grid is an integral part of VPP technology, it is likely to result in smarter energy networks with reduced power losses and down-time.

“The technology can be used to boost increased renewable energy generation in a distributed manner and can cater to sudden rise in demand in the form of a VPP. However, as VPPs are currently not allowed to participate in the Japanese wholesale market, it is a matter of time before it can actually change the course of existing norms.”