On 10 December 2018, an article by Yonhap News Agency reported that South Korean City Busan, together with Busan City Gas, real estate firm Korean Industrial Complex Corporation, energy management firm Nuri Telecom and Pusan National University will be involved in a project to build a blockchain-powered virtual powerplant.

The project is set to be presented at a national competition in 2019 hosted by the largest electricity utility company in South Korea, Korea Electric Power Corporation. The proposal will be receiving a financial support of 4 billion Korean won (KRW) from the government, which amounts to approximately $3.5 million.

The development of the VPP (Virtual Power Plant) can be interpreted as a step towards the establishment of a blockchain centre in Haeundae, Busan similar to that of Zug’s Crypto Valley in Switzerland, which was a plan revealed by South Korean governmental agency, Industry-SW ICT Convergence Association (WICA), in June. Moreover, Yoo Jae-soo, minister of economic affairs in Busan and former director of the Financial Services Commission (FSC) for financial policy reportedly held a meeting earlier this year aimed to discuss efforts required to build a blockchain-friendly and crypto-friendly environment in a specified zone. If Busan successfully becomes what it is planned to, the city has a high possibility of overtaking Seoul to be the most populated city in South Korea.

The impact of a blockchain-powered VPP should not be looked down upon. The power plant utilises blockchain technology to control and connect multiple energy sources of different types through a central IT control system. By linking solar, wind, heat and other types of power plants together using a central control system, data transfer, monitoring and work distribution will become more effective. The collaboration through a cloud could potentially increase power generation efficiency as consumer energy is reduced, while forecasting and trading of renewable energy also becomes more reliable.

Blockchain technology is being widely implemented by the country as time progresses due to efficiency it provides to multiple sectors. Another great example is the launching of a blockchain-based initiative within internal processes of South Korea’s second largest commercial bank, Shinhan Bank. This measure was taken to reduce record keeping problems that occur due to human errors.