Leveraging Blockchain into the Energy Industry

Peer-to-peer Trade via Smart Contracts

The most far-reaching application of blockchain in the energy sector is the application of smart contracts. This technology has the potential to alter the conventional energy supply models. Smart contracts automatically balance the supply & demand by including a series of set rules for the transactions. For example, if there’s an extra amount of energy, the surplus may be instantly sent into storage. In due course, if there’s insufficient output or the energy needs to be retextured to other sources, the excessive amount that was spared may be used.

However, today energy producers can mostly sell the energy back to the grid instead of trading it with another party. Energy exchange is restricted by the centralized regulations of the Distributed Energy Resources (DER). Blockchain-based technologies can make this system more flexible and contribute to the development of a customer-centric market. A recent Blockchain Program in Western Australia has created more trading opportunities and granted additional control of the electricity to the citizens. The program allows to buy, sell or exchange excessive energy with any resident linked to the Western Power network.

The European Union has recently issued a new policy entitled “The New Energy Market Design” that promotes the creation of small energy markets. The idea is to establish an ecosystem that combines blockchain, efficient metering systems, and advanced next-generation batteries that are capable to assemble energy locally. The included smart meters will transfer the data about the gathered energy to the distributed ledger which, in its case, will turn it into the form of an “energy coin”. These coins could later be sold or reacquired by the owners in case of need.

Data Storage and Energy Contract Management via Blockchain

Smart Contracts have the potential to promote and simplify the cooperation between energy suppliers and consumers. Today complex administrative routines are tiresome for the customer and quite costly for the supplier. For example, to change the provider the customer needs to close the remaining contract, spent a lot of time to create a new one, study the new terms& conditions etc. The usage of blockchain will optimize the sequence of operations and enable the client to finish the deal with the suppliers in a matter of a few clicks. Such method will pave the way into a more competitive energy retail market.

The transaction data will be safely stored on the blockchain platform, its audit will be simplified and the probability of cybercrimes will be utterly excluded. In prospect, implementing this technology can create an amplified and safe storage of all ownership records and any transactions related to them. Additionally, this blockchain database can be used to review and manage renewable power, as well as to control emission allowances.

Automation of Billing for E-cars & Gadgets with Blockchain

While the adoption of E-cars keeps growing, there’s a striking shortage of public charging stations. The major reason behind this is that there’s no appropriate billing model for these stations. In this case, blockchain together with advanced paying methods may be very appropriate. Measures that include blockchain may mechanize the whole process. The driver’s car is charged automatically, and the billing is made by the system directly after the driver leaves the station. What’s more, in the future the bills may be brought together and included in the general monthly electricity bill of the driver.

The blockchain system may let the electric companies set different prices on the energy depending on their current resources and issue a more profitable bill for the user in comparison with charging the car overnight.

The concept of “Smart cities” has been making its headway for the past few years. Due to its development, the cities need to use a new system of storing, transmitting and processing data that operates in a multitude of IoT devices. Establishing blockchain is a perfect choice because this technology allows real-time, cost-efficient, and secure ways of facilitating data between the city’s devices, like smart streetlights.

Blockchain in the energy industry keeps developing, yet its success depends on many factors, like the technological advancement, governmental support and the establishment of an appropriate legal and administrative framework, as well as investment dynamics.

‘Till next time.

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