Blockchain-Based REC System for Improving the Aspects of Procedural Complexity and Cyber Security

Abstract

In response to global efforts to deal with climate change, various renewable energy policies are being implemented. Among these, renewable portfolio standards (RPS) and renewable energy 100 (RE100) regulate the obligated supply of renewable energy to ensure compliance with set quotas by nations and institutions. In this context, the renewable energy certificate (REC) system is employed to assist obligated entities in meeting their renewable energy generation quotas. Obligated entities can purchase REC from renewable energy generators to obtain recognition for their renewable energy allocation. However, the current REC system is insufficient in addressing issues related to procedural complexity and cyber security. This study aims to overcome its limitations by applying the blockchain technology. Blockchain, a distributed financial network, serves as a digital ledger, enabling peer-to-peer transactions in a simple, transparent, and secure way. The proposed new REC system based on blockchain moves away from the complex structure of the traditional REC system, simplifying the system into four processes: participation, issuance, transaction, and authentication. Moreover, by applying blockchain algorithms, it addresses the cyber security issues of the traditional system. The case study using Hyperledger Besu, or one of blockchain platforms, demonstrates that the aspects of procedural complexity and cyber security are improved in the proposed system.