Blockchains don’t usually associate positively with the energy industry. Everyone knows how wasteful blockchain technology like Bitcoin and other cryptocurrencies can be to the energy industry. Some researchers even said that Bitcoin will increase global warming if it ever gets adopted in large scale. While this may be true, blockchain technology has enormous benefits in the energy industry if you look beyond cryptocurrencies.
Blockchain Technology In The Energy Industry
Blockchain technology can be applied in various accepts of the energy industry. Blockchain can be applied in energy trades, it can be integrated in microgrids and it can be used for a range of energy related transactions. One way blockchain can make the energy industry decentralised is by making it possible for micro-suppliers to receive payments quickly and efficiently for their contributions to the network. End users will enjoy cheaper bills when they join the network. Energy giants will be able to conduct trades with each other using blockchains. This will have a Ripple effect on the consumers who will enjoy lower fees while the companies enjoy more profit.
Microgrids are becoming increasingly popular in the energy sector today. Navigant Consulting predicted that the microgrid market will grow to $30 billion by the year 2030. While the market growth has slowed down recently, blockchain technology has the potential boost this progress. Blockchain technology can change the microgrid sector. For starters, the technology will improve interoperability between many different energy sources, consumers and suppliers that constitute microgrids. This is what the Energy Web Foundation is working on. The international nonprofit organization is trying to apply blockchain technology in several areas of the energy industry. Peter Bronski, one of the executives at EWF, said:
“Energy Web Foundation is building a core blockchain that is similar to but different from Ethereum. It is particularly tailored toward the energy sector. It will handle the unique operational, regulatory and market needs of the industry. It is the Energy Web Chain.”
EWF has already released a beta version of the Genesis block. The fully functional version is scheduled to be released by the second quarter of 2019. The blockchain will use smart contracts to monitor the distribution and production of renewable energy. The organization claims that some corporations have already joined in. Bronski continued:
“In our opinion, blockchain technology has the potential to revolutionize how distributed energy resources grid operators and other participants in the marketplace interact. They will be able to interact in a transparent, secure and efficient environment that will pave a way to the creation of new business models. It will especially be efficient when it is combined with artificial intelligence. The technology offers enormous capabilities that can enable flexibility and autonomous trading energy while integrating the locational value of loads and DER’s.”
Challenges Attached To Integrating Blockchain Technology In The Energy Sector
Just like every other technology, implementing blockchain technology is not without its challenges. These challenges must be eliminated if the application is to be smooth. Things like interoperability, scalability, and energy efficiency must be tackled. The issue of regulatory uncertainty has to be handled as well. A clear regulatory framework must be put in place if the energy industry is to enjoy the full potential of blockchain technology.
If these issues are sorted out, the next major work to be done would be in promoting adoption of the technology in the energy sector.
Do you think blockchain technology will revolutionize the energy sector? Share your opinion.