magine this: you have solar panels on your house that generate more energy than you need, so you decide to sell your excess energy. You go to an online marketplace, where you have the ability to sell the energy to your local utility—but also to your next-door neighbor or the grocery store around the corner, or maybe even an elementary school in the next state. You could even sell the excess energy that your Tesla doesn’t need. Such scenarios can be made possible with blockchain technology, a somewhat new way of securely recording transaction data using cryptography. Blockchain is making previously unusable smaller-scale, decentralized power sources available to the entire network to support autonomous and resilient electric grids, said Mahesh Sudhakaran, general manager for global energy, environment and utilities industry at IBM, Armonk, N.Y.

“One previous concern about this approach was the lack of trust,” Sudhakaran said. “But blockchain can validate energy generation, use and transactions to protect both suppliers and consumers” if the “block” of data for each transaction is recorded in a shared, immutable (unchangeable) digital ledger. This means there’s no question what electricity is used or returned to the grid, so the customer is never overcharged for the energy they consume,” he said. This new layer of trust can also assure traditional grid operators that devices are connected properly and electricity is distributed safely, while consumers and prosumers (those who produce and consume) “gain ownership over their energy systems and benefit from more reliable services.” Worldwide, blockchain technology is currently enhancing energy grids in a variety of ways, including bringing electricity for the first time to people in emerging countries by creating more trust between investors and local utilities to contract with one another. Here in the United States, one potential use is to create more vibrant online marketplaces for renewable-energy credits (RECs)