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Electricity Transaction Support Functionality

Overview

We are currently preparing to launch a service in October 2019 that will support the trade of electricity and environmental value through the operation of a Digital Grid Platform (DGP) that connects electricity producers of all sizes with diverse electricity consumers.
The DGP is a platform for trading electricity via smart contracts that exist on a Blockchain. DGCs are installed at the physical location of the customers (end users) of the various electricity retailers (consumer service providers [SPs]) that supply electricity on the DGP, as well as at the balancing groups (BG) and/or individual generators of the generator SPs who actually produce the electricity. Each DGC holds a private key necessary to conduct Blockchain transactions. DGCs send purchase or sale orders to the DGP, and trades are concluded based on the content of the orders (smart contracts).
During this process, it is possible to make long-term orders based on electrical demand predictions for up to a year in advance generated by AI. Because all orders are conducted in a certain areas, there are no concerns about market segmentation. The results of transactions on the DGP are aggregated and reported to the Organization for Cross-Regional Coordination of Transmission Operators (OCCTO) along with the planned demand values. Further, the results of trades made on the DGP are aggregated each month and settlement is processed. The system is designed to conduct processing of settlement via an account in trust, which allows our company to avoid bearing any credit risk.

Electricity Transaction Support Functionality

Electricity will be procured through transactions in two different markets; the long-term negotiated market, in which trades are made with producers based on the results of demand predictions for all demand locations generated by AI, and the short-term adjustment market, which is used to adjust for discrepancies between long-term predictions and actual demand. The power sources that will participate in transactions will naturally include traditional stable sources such as thermoelectric power. However, we will also leverage the strength of digital grid technology, its electricity identification functionality, in order to utilize renewable energy sources such as solar power and biomass power.

Electricity Transaction Support Functionality

 Merits of the DGP-based Trading Functionality

Merits for Consumers (Retailers)

  • Small-scale retailers can participate in trading
  • Large numbers of distributed demands can be automatically predicted, grouped, and provided with power sources (including renewable energy sources) that match the needs of the group.
  • Reduced transaction costs have the possibility of allowing electricity to be procured at relatively low prices that are also stable.

Merits for Consumers (Retailers)

Merits for GeneratorsProducers

  • The DGP makes it possible to apply long-term negotiated transactions to stable and long-term demands. This allows demand to be secured in a stable fashion without requiring costs for sales promotion.
  • Owners of small-scale power sources can participate in trading.