The highly regulated electricity sector 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, according to GlobalData.
The key challenges facing electricity utilities today are high operational costs, outdated networks, security, regulatory compliance and personalized customer service. Because of the potential for blockchain to address many of these sore points, business leaders are increasingly interested in experimenting with technology.
Archi Dasgupta, GlobalData's Disruptive Tech Analyst, commented: "Blockchain could be the main enabling factor for decentralization, democratization and energy liberalization 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 ".
An analysis of the Disruptor Tech Database of GlobalData reveals interesting cases of use in the real world of blockchain in the power domain and selects startups and power companies working on them.
The decentralization of power through the blockchain has given rise to trading platforms such as the one 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. This will not only reduce the costs of both utilities and consumers, but also the transparency of the network.
The Australian computerized company Power Ledger, known for the development of decentralized blockchain energy trading platforms, has 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.
Thanks to its intrinsic traceability feature, blockchain can improve tracing of faults in the power grid, which has never been a simple task. The technology can be used to stabilize and modernize the network in many ways.
The European transmission system operator The TenneT pilot with Sonnen using blockchain based on IBM's Hyperledger framework may allow energy storage systems within the network to absorb or discharge energy into excess in a few seconds and minimize transmission blocks.
Smart meters have made a buzz in past years of power for their consumer benefits. In a centralized network, however, they did not offer desired results, leaving them eager to experiment with their data on a decentralized network such as blockchain. The Lithuanian startup, WePower, worked in the same way in collaboration with the transmission system of Estonia Elering.
WePower managed to load 26,000 hours and 24 hours of production and energy consumption data from the smart meters of Estonia on the Ethereum blockchain, which led to the creation of 39 billion smart marketable energy tokens.
By exploiting the potential of blockchain, P2P energy networks are able to create a decentralized market that connects electric vehicle drivers (EVs) and owners of charging stations for mutual benefits. The German startup, Motionwerk, has launched a P2P-based share-sharing project based on blockchain Share & Charge, which allows users to share their private electric charging stations for money.
Other startup examples that fly with blockchain to cut off electricity include Drift, Electron, FlexiDAO, Grid + and Riddle & Code.
Dasgupta concluded: "Although blockchain technology has started to shrink from its initial phase in the energy sector, it is still largely dominated by proof-of-concept projects and small-scale production deployments. yet three to five years as there are several challenges to be faced, including installation costs, the need for power to perform the installation and, above all, the need to develop common standards and regulations. electricity is similar to banks in the way they are centralized and highly regulated, so it is crucial to create an ideal solution for the implementation of transformative technologies like blockchain. "