The UN’s World Energy Council (WEC) has partnered with Big Four, London-based auditing firm PricewaterhouseCoopers (PwC) to gain insight on blockchain in the global energy sector.
They interviewed 39 top-level energy management leaders and found that they believe blockchain has great potential in the industry, although they also stress there’s still a long way to go.
They also found the interviewees see great value in blockchain being decentralised and requiring no intermediaries to ensure the validity of high-value data and transactions.
“The technology is widely considered by energy leaders to hold great promise for catalysing and optimising existing business processes and transforming the existing energy market models,” reads the seven-page report.
In 2017, an estimated $100-300 million was invested in over 100 energy-sector related blockchain applications, it adds.
“The power sector has seen the growth of the global investment in digital infrastructure increase by more than 20% per annum since 2014, reaching $47 billion last year.”
This digital investment was nearly 40% higher than that in the entire gas-fired power generation sector, according to the Paris-based International Energy Agency (IEA), an autonomous intergovernmental institute of the Organisation for Economic Co-operation and Development (OECD).
There are now 122 blockchain startups operating in the energy space that have raised over $324 million in the past year alone. Since January 2017, 54 new blockchain-based firms have been founded.
Established energy players – including Siemens, Shell, IBM, Equinor, Engie, SP Group, TEPCO, EDF, Wipro – are also significantly investing in the technology.
“We identify seven different types of uses for blockchain, across the energy system,” the study states. “About 45% of the companies interviewed are trialling peer-to-peer (P2P) projects aimed at further inclusion of Distributed Energy Resources (DER) and consumer-centric transformation of the existing system.”
Five stages of maturity
The report evaluates the maturity of blockchain in five stages, which are embryonic, not mature, early adoption, mature, and full commercial implementation. None of the interviewees felt it has achieved mature or full commercial implementation. 45% of respondents believe it is still “not mature”; 28% says it’s in its early adoption, while 22% opted for embryonic.
“Much is yet to be done to ascertain the effectiveness of the technology and its full economic/technology viability,” they say. However, they expressed optimism in regards to blockchain’s technological feasibility and scalability.
Consumer participation is another issue that needs to be addressed because, despite the popularity of P2P blockchain systems, 60% of customers remain on default electricity tariffs, which cost them an additional £300 per year.
“Technologies dependent on customer engagement has always suffered historically to get customers involved and engaged, and blockchain is no different,” the report concludes.