Energising the blockchain sector
Three blockchain uses for the energy sector
Blockchain technology is experiencing phenomenal growth. Consider this blockchain spending worldwide reached $1.5 billion in 2018. It’s expected to nearly double by the end of this year, reaching $2.9 billion, and top $12.4 billion by 2022. The energy sector is poised to benefit from this “not-so-new” technology. In fact, a joint report entitled “Building Block (chain)s for a Better Planet” identified 65 existing and emerging blockchain uses that specifically benefit the environment through efficiencies in the energy sector. How so? Consider three applications.
Peer-to-Peer (P2P) Trading
Consumers want options for renewable energy. However, not all have the ability to set up solar panels or other energy producing infrastructures. Blockchains can provide a secure, transparent ledger of all energy production, consumption and the transactions of that energy. Blockchains have the ability to make energy trading accessible by providing an automated marketplace where consumers can buy, sell and bid.
Advantages for Electricity Providers
Electric power companies are often balancing multiple sources of energy, including power plants and solar farms. However, they often exist in silos, not communicating or competing with other utility providers. The blockchain’s ledger would allow firms to share information and data. The report mentioned in the introduction identified three ways providers can take advantage of the secure ledger data provided by blockchain technology.
- Process and validate data from multiple devices at the grid edge.
- Create a data transaction system to be used for distribution.
- Develop a system to transact energy among diverse sources.
Consider the example of Grid+, a company in Texas that created an app that made the world’s first blockchain-based energy retailer. They used Blockchain technology to enable utility companies to buy and sell electricity on behalf of a Grid+ user. The app gives real-time data about energy usage and wirelessly connects to a user’s energy-saving smart devices. How does it work? The app identifies fluctuations in the energy market and determines the best price point in real-time. The app, using blockchain technology, stores the cryptocurrencies and uses them for energy payments.
Challenges and roadblocks
Blockchain technology has many advantages, including real-time data management, improving access to renewable energy and opening up new business models for energy markets. However, there are challenges involved. According to an article from The Conversation, “Current blockchain designs are extremely difficult to develop, deploy and maintain.” Making a transaction on the blockchain requires technical knowledge, creating a roadblock to average users (and energy producers) contributing to the blockchain. This is especially true for P2P participants who may be average consumers.
To fix this problem, energy providers must create cloud-based blockchain services that automate the blockchain infrastructure. Blockchain applications must be able to provide a user-friendly interface to be effective.
The Future of Blockchain in the Energy Sector
Simply put, blockchain technology provides a public ledger that securely records transactions. It can dramatically speed up transactions and reduce costs by facilitating a trusted transfer of value without the involvement of a third party. While a growing number of industries are using it, the energy sector has been slow to adopt. However, blockchain is critical to decentralising and connecting energy providers, as well as providing an energy-sharing platform for consumers.
Another challenge for blockchain designs is that they run on algorithms that consume up to 215 kWh per transaction. Again, this energy usage is due to the huge computing requirements of validating and securing transactions on the blockchain. While blockchain technology will save money and energy in the long run, it requires additional data mining and energy consumption up-front. However, as it’s embraced more, consumers and providers will see reduced costs, environmental sustainability and increased transparency among stakeholders.
This November, the AIBC Summit will feature an illustrious line-up of speakers. Tune in to thought leaders such as Ann Shin and Dr. Pandwe Gibson, as they debate renewable energy, reducing carbon emissions and incentivising “green” behaviours, all through valuable energy data. Mindsets are changing and forward-thinking organisations are benefiting. Peruse the conference and workshop agenda on the AIBC Summit site.
Join the conversation with Bill this November – register here: www.aibcsummit.com
Malta AI & Blockchain Summit is a bi-annual expo covering topics relating to the global sectors for blockchain, AI, Big Data, IoT, and Quantum technologies. The event includes conferences hosted by globally renowned speakers, workshops for industry learning and discussion, an exhibition space accommodating more than 400 brands and a number of networking events.