Overview of Energy Sector in IndiaIndia now ranks 6th in world energy consumption

index. This is mainly due to the growing demand for energy, which is increasing at
a whooping rate of 3.6% per annum over the past 30 years. According to power
ministry, at the end of December 2012, the installed power generation capacity of
India stood at 210951.72MW, while the per capita energy consumption stood at 733.54
KWh (2008-09). The total demand for electricity in India is expected to cross
950,000 MW by 2030. Two-thirds of rural India is still waiting to get electricity.
The power generation mostly depends on thermal (coal, gas, oil) � 67%, hydro �
13.5%, nuclear � 2.1% and RES (Renewable Energy Sources)- 17.4%.Today, we are
highly dependent on non-renewable source of power generation, and hence require
alternate source of power generation like solar, hydro, wind, biomass power, and
power from urban and industrial waste.Thrust on Solar Power GenerationThe level of
carbon emissions is alarming, and India is considered to be the third largest
emitter of greenhouse gases in the world. It is estimated that if India continues
to use its current mix of fuel sources to achieve its energy needs, the impact on
world environment would be devastating.To address this grim situation, PM Modi has
committed to install 175 GW of additional renewable capacity by 2022, of which 100
GW would be solar. Government is giving a subsidy of up to 70% for installing solar
power panels. Large solar power farms are being set up for power generation across
the country. As of 30 April 2017, the country�s solar grid had a cumulative
capacity of 12.50 GW. India quadrupled its solar-generation capacity from 2,650 MW
on 26 May 2014 to 12,289 MW on 31 March 2017. The average current price of solar
electricity has dropped to 18% below the average price of its coal-fired
counterpart.Current Solar Power Distribution Landscape in India and
ChallengesToday, solar power must be directed to national grids for distribution.
There is no off-grid mechanism to save on transmission cost and wastage. This also
results in extra infrastructure set-ups and admin cost. The existing power grids
are obsolete and not equipped to handle renewable energy very efficiently. India�s
transmission losses were among the highest in the world, at about 27% in 2014.
Solar farms depend on the ability to resell power to the public grid to maintain
profitability � a benefit that�s not possible in off-grid settings. This also
limits power distribution to rural areas that are not connected to power grid.There
is a serious need to look at alternatives like producing in-situ solar power and
off grid distribution, on a small-scale basis to avoid wastage and to provide power
to rural areas that are not connected to a central power grid. Blockchain can
enable an off grid decentralized sustainable solar power distribution FrameworkIn a
country like India, where people in rural abodes are still deprived of electricity,
solar power holds a lot of promise. Solar power is abundantly available and gives
each household an opportunity to generate power of its own. This paves path for
development of a self-sustained power generation capacity that has less reliance on
a centralized framework.The solar power generation capacity can range from large
solar power farms to even a small household in a village community. In such a
community-based power generation set up, the points of power generation are
distributed which may not work well with current day�s centralized power grids. The
idea requires a technology that compliments decentralized, distributed and self-
managed power generating frameworks -a technology that enables direct P2P sale of
solar energy.A blockchain-enabled decentralized P2P micro power grid structure can
bring together small groups of a community together, to buy/sell solar power for a
price without directing power to a central grid. Photovoltaics systems installed on
rooftops of various households in vicinity can be interconnected through the
conventional power micro grid. The transactions will be managed and stored using a
central blockchain connected to the grid.The implementation of the idea would
require smart meter technology and blockchain with inbuilt smart contract
functionality. The smart meters will keep the record of energy produced at every
point, and blockchain will record the transactions between various households and
solar farm owners in a community set up. Blockchain powered micro grid will record
data, transfer solar energy units in exchange of a digital-currency within a
village or community based decentralized solar power microgrid. It can also
facilitate �smart contracts� that triggers automatic payments and transfers between
producers and consumers, as and when energy units are purchased or sold using
redeemable digital tokens. Prices can fluctuate based on supply and demand to
create a market-based clearing mechanism. With blockchain, a level playing field is
created for producers, prosumers, and even for a single person with a single solar
panel who wants to sell out the excess energy units produced. Such projects can be
operated at a cooperative community level, with all the solar panel holders in
vicinity as stakeholders.A consortium of solar panel owners in a small village can
benefit in 3 ways by setting up a blockchain-based decentralized solar power micro-
grid1.Various solar panel owners located in vicinity or a small village can come
together, form a consortium, be a part of micro-grid and release a digital currency
for energy trading2.The nodes on network can buy and sell less/excess energy units
available across nodes for exchange of digital tokens3.The expenses involved in
setting up a distribution infrastructure across village can be addressed by
inviting investment in form of equity holding and distributing stake in the form of
cryptocurrency4.Profitability can be ensured by setting up a real-time demand
supply price mechanism for producers, prosumers, consumers and investors5.Dividends
can be triggered out in the form of digital tokens to investors wallet based on
fulfilment of certain criteriaAdvantages of Blockchain powered Solar
Infrastructure1.Boost to green energy: Rural parts of the country can set up a
self-sustained power generation center and meet their electricity needs.
Simultaneously, they can produce green energy, and reduce dependence of non-
renewable and polluting energy sources2.Disintermediation: A huge reduction in
intermediaries like govt. departments, private companies, third parties managing
distribution. The whole process of energy generation and distribution will become
more direct between suppliers and consumers that requires minimum human
interference. For instance, a consumer can directly enter in a contract with power
generating company. There is no need of agents to keep track of meter reading, unit
consumption, and previous months reading, calculating bills and sending across to
customer. A customer can have a real-time visualization on his energy consumption
and how he is being charged.3.Low Cost: Lower transaction costs due to the cutting
out of intermediaries, and decline in energy prices because of greater market
transparency4.Level playing fields in energy market: Flexible products (tariffs)
and supplier switching. Empowering of prosumers due to freeing up from central
authority (direct purchases/sales of energy)5.Permanent Log of activities: There
are no extra efforts needed to capture the transactions between various entities.
Each activity of nodes connected on blockchain is recorded in a chronological order
for reference.6.Error free: The dealings and invoice generation will be completely
transparent and automated. This brings down the administration and dispute handling
time and cost. Blockchain wipes out the chances of any error or manipulation to
bill amount.Way ForwardThe effort is in very early stages of development and being
tested on a very small scale. Going forward, the private energy players in the
country would want to capitalize on the opportunity by providing essential
infrastructure like micro grids, smart meters and a blockchain platform, and act as
an aggregator to bring all energy producing points in a village or a community
together. The move would promote competitive pricing and make energy more
accessible for everyone in the country.