Blockchain could be "the main promoter of decentralization, democratization and liberalization in the energy sector", according to a new report.
The study of the analysis firm GlobalData states that the highly regulated electrical energy industry needs enabling factors to move away from traditional business models with complex operating structures. "Blockchain technology is such that it creates a paradigm shift in the industry towards a more decentralized and transactional environment," he says.
He added that the main challenges that utilities face today are high operational costs, outdated networks, security, regulatory compliance and personalized customer service. "Because of the potential for blockchain in addressing many of these critical points, business leaders are increasingly interested in experimenting with technology."
Archi Dasgupta, Disruptive Tech Analyst at GlobalData, He explained: "Blockchain could be the main enabling factor for decentralization, democratization and liberalization in the energy sector, using smart contracts, technology can enhance bilateral agreements in real time by eliminating delays in intermediate points that lead to a significant reduction in operating costs of utilities ".
GlobalData has highlighted several cases of use in the real world of blockchain in the power domain and has selected startups and electrical companies that work there.
"The decentralization of power through the blockchain has given rise to trading platforms such as those implemented in the Brooklyn microgrid by LO3 Energy where energy can be bought or sold directly within a peer-to-peer network (P2P), eliminating the need for intermediaries, which will not only reduce the costs of both utilities and consumers, but also the transparency of the network. "
GlobalData has also focused on Power Ledger, the startup encrypted in Australia, known for the development of decentralized energy trading platforms on blockchain, which launched its first commercial deployment in the United States. Its distributed P2P blockchain network allows consumers and businesses to sell their solar surplus in their neighborhood without an intermediary.
"Because of its inherent traceability feature, blockchain can improve tracing failures in the power grid, which has never been a simple task.Technology can be used to stabilize and modernize the network in many ways," Dasgupta said.
It also highlights the pilot of TenneT, European operator of the transmission system, with Sonnen using blockchain based on IBM's Hyperledger framework, which can allow energy storage systems inside the network to absorb or discharge power in excess in a few seconds and minimize transmission blocks.
The report adds: "Smart meters have made a buzz over the past years of power for their consumer benefits, but in a centralized network they did not offer desired results, leaving them eager to experiment with their data on a network. decentralized as blockchain.The Lithuanian startup, WePower, worked in the same way in cooperation with the transmission system of Estonia Elering.
"WePower managed to load 26,000 hours and 24 hours of production and energy consumption data from smart meters from Estonia to the Ethereum blockchain, which led to the creation of 39 billion smart energy tokens that are marketable".
Dasgupta said: "Although blockchain technology has begun to scale down from its development phase in the energy sector, it is still largely dominated by proof-of-concept projects and small-scale production deployments.
"Its large-scale commercial adoption is still three to five years as there are several challenges to be faced, including implementation costs, the power requirement to run the installation and, above all, the need to develop standards. and common regulations.
"Power utilities are similar to banks in the way they are centralized and highly regulated, so it is crucial to create an ideal set for the implementation of transformative technologies like blockchain."
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