Relief comes as decision makers in the Energy sector and utility companies have finally given the nod to the blockchain. They have agreed that blockchain can indeed be resourceful in addressing challenges in this industry. The German Energy Agency claimed that blockchain technologies can be implemented to improve the efficiency of current energy practices and processes. They can even accelerate the development of IoT platforms and related digital applications. They are also capable of providing innovation in P2P energy trading and decentralized energy generation. Improving internal processes, customer services, and costs are also some of the areas blockchain technology can improve.
Potential impact of blockchain on Energy Company Operations
Dwelling on the long list of advantages offered inherently by blockchain, the technology could effectively provide solutions across the energy trilemma:
- Blockchain could reduce costs by optimizing energy processes,
- Offer better energy security in terms of cybersecurity, at the same time acting as a supporting technology that could tighten the security of supply, and
- Ensure sustainability by facilitating renewable generation and low-carbon solutions.
Blockchain technologies could be implemented in a wide range of use cases related to the operations and business processes of energy companies.
- Billing: Smart contracts layered on blockchain and smart metering can materialize automated billing for both the consumers and distributed generators. Utility companies can benefit from the capacity for energy micro-payments, pay-as-you-go solutions, or payment platforms for prepaid meters.
- Sales and marketing: Blockchain systems can customize sales practices to suit consumers’ energy profile, individual preferences and environmental concerns. When coupled with Artificial Intelligence (AI) techniques such as Machine Learning, Blockchains can identify consumer energy patterns and thereby provide tailored and value added energy products provision.
- Trading and markets: Blockchain-powered distributed trading platforms reserve the potential to revolutionize market operations like wholesale market management, commodity trading transactions, and risk management.
- Automation: Blockchains applications can enhance control of decentralized energy systems and microgrids. Installation of local energy marketplaces facilitated by localised P2P energy trading or distributed platforms may significantly increase energy prosumerism, which can potentially impact revenues and tariffs.
- Smart grid applications and data transfer: Blockchains can effectively be applied to the processes of communication of smart devices, data transmission, or storage. Intelligent devices operating in the smart grid include smart meters, advanced sensors, network monitoring equipment, and a control and energy management system. Thry also includes smart home energy controllers and building monitoring systems. Additionally, they may add a layer of security to data transfer. Smart grid applications may further avail themselves of data standardization allowed by blockchain technology.
- Grid management: Blockchains are capable of assisting in the management of decentralized networks. They can render flexibility to services or asset management. Blockchains may attain integrated flexibility in trading platforms. optimizing flexible resources, which might otherwise lead to expensive network upgrades. This could result in blockchains affecting revenues and tariffs for network use.
- Security and identity management: Blockchain offers transaction security through its sophisticated cryptography used to encode each block of transaction. Blockchain can protect privacy, data confidentiality, and identity management.
- Sharing of resources: Blockchains systems may provide chargeable solutions enabling resources sharing among multiple users, such as sharing EV charging infrastructure, data or common centralized community storage.
- Competition: Smart contracts layered on a blockchain can simplify and accelerate the process of switching energy suppliers. Increased mobility in the market would increase competition and effectively reduce energy tariffs.
- Transparency: Immutable records and transparent processes would significantly ease auditing and regulatory compliance.
Also Read: Energy Transaction Solutions with Blockchain Architecture
Blockchain may impact the energy sector in a number of ways yet to be discovered. Blockchains-enabled systems make it possible to potentially revolutionize legacy business models and traditional roles of energy utility companies as discussed and shown above.