Sairam Jalakam Devarajulu, a Blockchain Technology Expert, writes a column for DM about using Blockchain technology in power distribution.
Power distribution in rural areas is often inefficient, unmonitored, and prone to losses. Microgrids, whether localized or small-scale energy systems, are a promising solution for these regions. However, managing them transparently and effectively remains a challenge. This is where blockchain steps in, offering a decentralized infrastructure that enhances visibility, efficiency, and trust.
Think of blockchain as a shared, digital ledger that’s always up-to-date and visible to everyone involved. Every unit of electricity generated, stored, or consumed can be tracked, validated, and recorded in real-time—without fear of manipulation.
Blockchain works by recording each transaction—whether it’s a kilowatt-hour generated by a solar panel or a unit of energy consumed by a household—as an encrypted data block. These blocks are validated across a decentralized network and chained together to form an unchangeable history. This creates a reliable, auditable trail of energy movement that doesn’t rely on any single authority.
In practical terms, smart meters installed in homes and community infrastructure send energy data directly to the blockchain. That information is used to balance supply and demand, identify theft, and ensure that energy is distributed fairly across the microgrid.
Peer-to-peer energy trading becomes viable in this environment. If a household produces more energy than it needs—say from rooftop solar panels—it can sell the surplus to a neighbor using a smart contract. These automated digital agreements instantly handle payments, confirm delivery, and update ownership records without needing a central utility company.
In Bangladesh, a blockchain-enabled microgrid pilot project helped rural families sell excess solar energy to neighboring homes, fostering local energy economies and reducing reliance on diesel generators. In Kenya, PowerGen has experimented with microgrid blockchain integration to enable real-time load tracking and tokenized billing.
According to a report by the International Renewable Energy Agency (IRENA), “Blockchain could become a foundational element in decentralized, renewable energy systems by enabling trusted and autonomous energy exchange.”
Blockchain can also reward users for conservation. Smart contracts can track who saves energy or shifts usage to off-peak times, then reward them with tokens. These tokens might be redeemed for discounts, community credits, or reinvestment into shared infrastructure—creating incentives that align personal behavior with community benefit.
To be clear, this technology doesn’t work in isolation. It needs reliable internet, trained local operators, IoT infrastructure, and supportive policies. But the foundation is strong—and the need is urgent.
Governments, energy cooperatives, and NGOs should begin piloting blockchain-backed microgrid systems in off-grid and semi-grid regions. Start with digital metering, introduce smart contracts for energy credit distribution, and connect communities through mobile-based energy wallets. The technology is here—the opportunity is to apply it where it matters most.
As someone working in blockchain and clean energy systems, I’ve seen the gap between innovation and implementation. Too often, rural communities are the last to benefit from technological progress. Blockchain doesn’t just fix flaws in the system—it empowers people to control their own energy futures.
In places where traditional utilities never reached or failed to deliver, blockchain-backed microgrids offer not just power, but empowerment.