Can Blockchain Change The Way We Use Our Energy?
By: Nexus Chain
Tags: Cryptocurrency, Blockchain Technology, Smart Contracts, Blockchain, Technology

When new technologies have the possibility to become a game changer, industries will certainly look into the possibilities it can bring. The big buzz around blockchain has been focused on finance and cryptocurrency, business, supply chain, and healthcare yet there has been little talk of the implications of blockchain in the energy sector.

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A systematic review revealed that there have been 140 research projects on the uses of blockchain technology and that they “are a promising technology for a wide area of services and use cases in the energy sector.” The emerging potential of blockchain technology can bring immense change in the industry considering there has been some challenges with renewable energy resources, distributed energy resources, and emission reduction. There is an estimated high cost to achieve optimal emission reduction. And while recent trends have called for environmentalism, renewable energy resources still face high volatility which concerns customers and suppliers alike.

What Is It About Blockchain?

Andoni et al defined blockchain as “a digital data structure, a shared and distributed database that contains a continuously expanding log of transactions and their chronological order.” This decentralized digital spreadsheet contains the data of all people within the company, from suppliers to consumers, with different encrypted keys for access. Everyone will be able to access these files and will be able to see uploaded information in real-time. Among the various uses of blockchain technology, one of the most important features are the “smart contracts.” Smart contracts automatically validate transactions following the encryption placed in the platform without a need for human intervention. This implies a quick and transparent system for the energy sector if they choose to integrate blockchain. The research paper mentioned several uses:

Uses of Blockchain in the Energy Sector

There will be faster and easier billing due to smart contracts. This helps companies with energy meters and prepaid meters especially for the distributed energy resource sector.

Smart contracts also allow easier automation processes, like meter activities. This help control decentralized energy sources and allow peer-to-peer trading for energy.

Absence of third party networks and possible peer-to-peer trading reduces cost drastically.

Transparency of information builds trust from the energy supplier, to the distributor, and up until the consumer. Blockchain platforms can share important data while keeping critical data secure from unnecessary parties.

Customers will have more options regarding their energy use. Blockchain technology can track their energy use and preference, like whether to go green.

Blockchain technology can reduce the cost of a global supply network due to fast transactions from the supplier up to the customer.

Beneficial for Renewable Resources

In 2016, over 24% of consumed electricity in the UK came from renewable energy resources. There has been a spark of interest in renewable energy due to environmental concerns but renewable energy resource depends on the weather and is quite difficult to predict which makes sustainability a challenge for companies and consumers alike. Blockchain can, however, help alleviate some of its minor problems due to fast-acting transactions between parties. Blockchain in the energy sector can benefit from the flexibility the platform provides, especially with renewable resources.

Cost Reduction for Consumers and Companies Alike

And while the platform boasts robust security and smart contracts, the most convenient uses of blockchain technology the energy sector can take is a big reduction of costs for the company and the consumers. Companies can offer a wide array of options for their customers from metered energy to cryptocurrency payments. Consumers have more options to choose from if blockchain is applied to the energy sector.

While full blockchain technology adoption may take some time, the energy sector is starting to take notice. Companies like Deloitte have started to come up with a blockchain architecture for energy companies. However, it will be challenging for the industry because all companies concerned must collaborate to come up with a similar system.

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