The role of blockchain in the energy industry

Blockchain is becoming more widespread and represents great potential for the energy industry

As with many industries, the perception of blockchain by the energy industry is one of great potential. When it comes to the question of full-scale adoption of blockchain in the energy industry, industry experts generally think it’s going to take time.

Blockchain energy – sector research

The UN’s World Energy Council (WEC) undertook a global research program in 2018 involving 39 energy companies such as General Electric, National Grid UK, and the New Zealand Electricity Authority. They partnered with professional services firm PricewaterhouseCoopers (PwC) to conduct the interviews.

They produced a report – the World Energy Insights Brief 2018 – and there were some interesting findings. They basically posed the question of whether blockchain in energy was driving revolution or evolution.

WEC/PwC World Energy Insights Brief 2018 key points

  • In 2017, an estimated $100–300 million was invested in over 100 energy sector-related blockchain applications
  • The power sector has seen the growth of global investment in digital infrastructure increase by more than 20% per annum since 2014, reaching $47 billion in 2017
  • At the time the report was published, there were 122 blockchain start-ups operating in the energy space that had raised over $324 million in 2017 alone
  • About 45% of the companies interviewed were trialling peer-to-peer (P2P) projects
  • None of the interviewees felt blockchain or its applications had achieved full commercial implementation
  • The conclusion was that blockchain has great potential but is still in the development stages, and they would need more time before a full commercial roll out was possible

You can read more about the report in our full article.

So, it’s clear from the research that the industry is taking blockchain seriously and anticipates large-scale adoption, but what kind of energy-related projects are being developed?

WePower puts entire energy grid on the blockchain

Blockchain start-up WePower recently tokenised a year’s worth of Estonian electrical grid data. The project involved capturing all the consumption and production data from Estonian transmission system operator Elering onto the blockchain. This hourly data from 700,000 households was aggregated by address and turned into 39 billion smart energy tokens.

Each token is a digital self-settling power purchase contract representing one kilowatt-hour of power. The tokens are tradable and can be sold into the local energy wholesale market.

SP Group launches blockchain-powered renewable energy certificates marketplace

SP Group launched one of the world’s first blockchain-powered renewable energy certificate (REC) marketplaces at the ASEAN Energy Business Forum (AEBF).

The new marketplace enables local and international organisations – regardless of size, business, or location in the world – to trade in RECs.

Fremantle blockchain-powered solar energy pilot

The Australian city of Fremantle has announced a trial in which 40 residential properties will be able to trade solar energy on a blockchain-enabled platform provided by Power Ledger.

The RENeW Nexus project is managed through Curtin University and is supported by the Australian government through the Smart Cities and Suburbs Programme.

Energy Web Foundation

UK-based distributed ledger technology and smart contracts venture Applied Blockchain became an affiliate of non-profit organisation Energy Web Foundation (EWF) in 2018.

EWF is an ecosystem of global energy companies, utilities, grid operators, blockchain developers and users, and infrastructure providers collaborating on the implementation of large-scale blockchain-powered projects.

EWF and PJM-EIS build blockchain-based pool for renewables

Energy Web Foundation and PJM Environmental Information Services Inc (PJM-EIS) recently announced a landmark collaboration in blockchain energy. The project is focused on developing and testing a market-wide reference implementation of a decentralised toolkit for renewable energy and carbon markets. The toolkit simplifies and enhances the way in which customers procure renewable energy.

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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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