Blockchain And Energy Efficiency
Nov 21, 2021
As industries around the world undergo considerable revolution at the mercy of ever improving technology, the energy industry has remained somewhat stagnant. But there are cracks appearing in this stalwart stance by the industry, as the sector starts to see the potential benefits of a particularly interesting technology to us: Blockchain.
Peer to Peer Energy Trading
One of the great opportunities here has been the ability for peer to peer trading of energy, especially in light of independent renewable energy producers. Distributed Energy Grids (or DERs) connect to the national power gridlines, and transform energy consumers into producers who can sell their excess power into the grid. But this legacy model of dynamic electricity markets that sees the buying and selling controlled by centralised utilities is cumbersome.
Blockchain tech is enabling customers to trade with each other within specific jurisdictions, as we’re seeing by the enabling of Australian blockchain energy project Power Ledger. Another such example is Brooklyn Microgrid who have developed an app enabling the trading of energy within specific neighbourhoods, or Grid Singularity in Europe who are focussing on the secure exchange of private data between energy sector parties.
The reason companies like these among others are deploying blockchain in the energy sector is because energy can be converted into blockchain-based tokens (like a cryptocurrency), and then traded for local currency, or even held in a specific wallet to be traded later. Blockchain allows for a much simpler process of conversion and trade, and responsibly tracks the specific data like energy produced and its value.
Beyond just the conversion of energy into tradable assets, we’re also seeing electricity utilities turn to blockchain in order to improve the control of their energy sources. As reported by ConsenSys, an immutable ledger allows for secure and live readings of power consumption by location in comparison to power production.
This kind of data is often manipulated or misreported due to the sheer scale of such data, and the financial implication of this is enormous. The ability to track such data reliably and transparently on an immutable ledger (so it cannot be hidden and covered up) will mean that utilities can trust the information they’re given and make accurate decisions in their energy planning.
While there are numerous examples of this, one such use is that in Chile, where the Chilean National Energy Commission have begun trialling a project built on the Ethereum blockchain, allowing them to record, store and track their energy data in a secure manner. Not only will this mean more reliable data for each chain of command, but will also allow the public to access the prices of local energy and subsequent transactions and trust that the data is accurate.
These two areas are only the beginning of exciting developments in the energy sector as it begins to implement the technological prowess of blockchain. The options available to businesses in this industry will see lower transaction fees, faster data compilation and processing, and more reputable information sources among others. Energy, being entirely “ephemeral” (digital), is one of the easiest ways to leverage blockchain technology, and our research team here at MEX Digital are seeing this on an increasing basis.
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