ENERGYIDENTIFYING CURRENT AND FUTURE USES OF BLOCKCHAIN TECHNOLOGY IN THE ENERGY SECTOR
ISSUES WHICH CAN BE SOLVED WITH BLOCKCHAIN TECHNOLOGY
Although the energy industry has been slow to recognise its potential, it is perhaps the sector where Blockchain has the most practical applications for day-to-day living. Offering energy companies a more efficient way to record and process data and customers an easier and more accurate way to manage their bills, the use of Blockchain can significantly streamline global distribution of energy.
The energy market in the UK is an increasingly complex and competitive landscape, with a number of suppliers offering their wares to customers but with little differentiation between them. Accordingly, it is increasingly difficult for the consumer to separate suppliers; and this creates an uncompetitive market economy. But given the transparency that Blockchain can provide, there will be an opportunity to separate the ‘wheat from the chaff’ – and hand power back to the buying public.
Errors in Meter Reading
In the energy industry, Blockchain technology has the ability to remove the need for manual metre reading and the inaccurate estimated bills that come with it. Using a utility metre that fed information about energy consumption digitally into a Blockchain would allow energy companies to verify a customer’s usage with 100% certainty and enable them to send out an accurate bill. In turn, this bill could be paid for on the Blockchain without incurring fees associated with bank transfers.
Reduce Energy Wastage
Another potential use of Blockchain in the energy industry is using it as a public ledger of solar energy production. With solar advocates recently launching their own cryptocurrency, SolarCoin, devices are being created that record solar energy production and feed this data directly into a Blockchain, with owners automatically being rewarded for the energy they generate in SolarCoin. This incentivises the development of solar technology and promotes the use of renewable energy.
Transfer of Energy
Although little Blockchain innovation has taken place in the energy industry, one South African start-up company has prototyped an application that lets users ‘send’ electricity, water or gas to any recipient anywhere in the world. Utility metres powered by the app feed data into a Blockchain, where energy levels can be monitored and metre top-ups can be purchased and sent using Bitcoin. In practice, this would allow grandchildren to top up an elderly relative’s utility metre remotely.
By utilising Blockchain technology the energy industry could evolve into a more globally connected network of energy transfer, whereby everyday consumers would be an active player in energy suppliers via renewable energy initiatives and peer 2 peer networks.
Global Energy Transfer
In the future, blockchain technology could be used to ‘send’ energy such as electricity or gas anywhere in the world via utility apps that are built utilising the blockchain. In practice, this could lead to nations sending foreign aid via energy to developing nations with everything tracked and recorded openly. This could also develop the current state of the remittance market, with workers sending energy back home instead of money.
Smart Energy Usage
Instead of paying for energy at a set rate, in the future each household could utilise blockchain technology to constantly search for cheaper energy prices and instantly change providers if there’s a better deal. Households might find they’re buying energy from multiple suppliers throughout the day, all of which would be automatically handled by the blockchain based application. A smart plug prototype by Accenture aims to do this with electricity, however in the future all energy used could follow the same pricing model.
In the future consumers could utilise blockchain-based applications to join a smart grid, in which participants can publically track their energy usage and production (such as via solar panels) and sell on any energy not used to others on the smart grid. This could lead to more competitive energy pricing for consumers as major energy companies would be competing with entire communities across the world.
A decentralized ledger that records energy generated by consumers and communities (such as via solar panels) could be converted into renewable energy credits issued by Governments. This in turn could be used to purchase commodities as a renewable energy incentive. This new currency would work alongside the Blockchain called a sidechain and can already be seen via the work of companies such as SolarCoin.
CASE STUDIES ON THE USE OF BLOCKCHAIN FOR THE ENERGY SECTOR
What are some of the uses of Blockchain technology in the energy sector?
The complete transparency of the Blockchain is something of a boon for a number of sectors; not least energy providers, who generally lack the public trust as scandal and investigation reveals details of a lack of integrity with some suppliers. With a Blockchain in place this no longer will be a problem; ensuring that the energy companies that do operate in a trustworthy fashion will enjoy greater rewards than those who do not.
The transparency of the Blockchain manifests itself in a number of ways in the energy sector, particularly in reference to the matter price changes and fees which tend to dominate the industry. The matter of tariffs and billing are a source of much confusion for the consumer, and the Blockchain will enable them to make more informed purchasing decisions from energy suppliers. A Blockchain solution identifying where the energy is coming from, at what unit price and any mark-up passed to the consumer will help to regain integrity in an industry blighted by mistrust.
Quite simply, integration of the Blockchain protocol would enable smarter metering systems, and this in turn will enhance the efficiency with which the end user pays for their energy. These are, in many cases, more cost effective to deploy than manual payment systems due to the decree in labour and ‘man hours’ required to calculate payments and monitor usage.
A number of energy suppliers in the UK automatically switch their customers over to a more expensive tariff at the end of their fixed term, and unless the customer in question fails to check their new plan in advance they could find their bills increasing substantially. This, naturally, is rather displeasing for the individual, and leads to decreased client retention rates. But with greater transparency comes fairer pricing and a greater awareness from the buying public; thus eliminating the issue of dissatisfied customers.
LEADING PROVIDERS OF BLOCKCHAIN SOLUTIONS FOR THE ENERGY SECTOR
Companies in the energy industry have started to combine Blockchain technology with smart metering systems, creating new products and services to a number of industries that have already started to integrate technology systems into everyday practices.
Digital Asset combines unparalleled financial markets leadership with world-class technologists across multiple fields in one of the fastest growing fintech companies in the world. The Digital Asset Platform is the only Distributed Ledger platform to have been developed according to the production requirements of the world’s largest financial institutions.