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Blockchain Is Critical to China’s Energy Plans

In 2022, we are seeing new infrastructure development plans from the Chinese government in the blockchain area. Last month, the China Energy Administration (CEA)—the state agency responsible for formulating energy policy under the National Development and Reform Commission (NDRC)—announced that they would explore blockchain-based power trading platforms to facilitate electricity trading between self-contained power generation units and the state and national grids, according to a policy document released late August. The policy will explore the possibility of small and medium-sized power generation and storage facilities that service local neighborhoods to trade energy with state and national grids. This plan aims to avoid or alleviate power outages in the event of natural disasters or droughts—like the recent drought and heat wave, which has taken a toll on Sichuan province’s electricity supply, causing massive industrial and residential power cuts.

Blockchain is ideal for this project. The technology’s immutable characteristics can provide transparent and reliable electricity metering and proof of transactions. Blockchain is a decentralized, unchangeable database that makes it easier to track assets and record transactions in a specific network. It stores transactional records through a network of connected peer-to-peer nodes, or blocks, linked together via cryptography. In more detail, as new data comes in, it is entered into a fresh block. Once the block is filled with data, it is chained onto the previous block, which makes the data chained together in chronological order. Therefore, this technology allows digital information to be recorded and distributed, but not edited, improving data's traceability, security, and trustworthiness.

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