Blockchain in the energy markets is set to be the next big thing. A recent report by Premium Market Insights expects it to hit US$35 billion by 2025. So what makes this market tick? We delve deeper to find out.
There is a rapidly increasing utilization of blockchain for data management, for tracking financial transactions and financial interactions. It also provides a secure network for businesses to manage data. Blockchain reduces operational costs and capital expenditure provides better risk management and security. Automation is gaining popularity these days which needs data integrity and security which is driving the growth Global Blockchain in Energy Market. Furthermore, increasing focus on enabling real-time transactions and designing of more vigorous business models is aiding to the growth of the market.
Challenges Remain
However, a shortage of regulatory standards, indeterminate regulatory landscapes, and authenticity concerns of users are the restraints to the market. In the energy sector, blockchain will facilitate people to trade energy among each other. The unused energy is sold to neighboring buildings. While all the buildings are still connected to the grid, transactions are managed and stored on a blockchain. The Blockchain has many uses such as facilitating a peer-to-peer energy trading model, propagation of Distributed Energy Grids (DERs) and other independent renewable energy sources like solar panels. Smart utility metering systems, Decentralized energy data platform, Supply chain and logistics optimization, Asset Tracking, Bill of Lading and Transfer of Title processes are just a few of the key potential drivers of the technology.
A Virtual Blockchain Power Plant
According to reports, Sonnen Group has launched a virtual power plant (VPP) in Germany that will store any excess energy that would in normal circumstances, be lost. Apparently, the VPP will be powered by blockchain technology, with the participants making payments in a digital currency. It has partnered with the Energy Web Foundation, a global non-profit organisation that promotes the use of blockchain in the energy sector. It seems that the transactions between the VPP and the grid operator will be processed through smart contracts on the EWF blockchain. Once the transactions are successful, the operator will pay Sonnen Group through the digital currency DAI.
Startups Are The Way To Go
Back in 2019, oil and gas giant Royal Dutch Shell, or commonly known as Shell, invested an undisclosed amount in a New York-based clean energy startup. It joined Japanese trading giant Sumitomo Corporation to invest in LO3 Energy. LO3 has the Exergy platform, which tracks the flow of energy as it is added to a shared local energy network. It’s an Ethereum-based platform that allows its users to verify where their energy is coming from, including renewable sources such as windmills and solar energy panels. LO3 is slated to start operations this year.
24/7/365 Renewable Energy
Forget about 100% renewable, now it’s all about 24/7/365 renewable. To achieve 24/7, 365 renewable energy, time and location are key. Companies must align the time and location that the offset power was produced with the exact time and location that the fossil fuel energy was used. To achieve ‘genuine’ 24/7, 365 renewable supply, the load needs to be matched hourly, or in shorter time intervals, with the regional carbon-free energy supply, made up of renewable generation, storage and flexibility, from the specific grid to which the load is connected. This is where blockchain technology can make this vision a reality.
Sources: Premium Market Insights, LO3 Energy, Shell.
First Published on: Asia Blockchain Review
