Last year, Blockchain developed into a central technology of the future. Many companies are currently developing applications for various industries. But one area that seems particularly promising is the energy sector. Established energy companies are starting their first pilot projects with blockchain technology. Others are starting to cooperate with start-ups to play a role in disrupting the energy market. The blockchain can become the largest actor in the decentralization of the current energy system.
For energy companies and grid operators, the decentralised possibilities of the technology mean reduced transaction costs, better grid and user management and completely new financing models. But blockchain applications also bring a number of advantages for the end consumer.
Current reading – a new link between supplier and customer
One of the most likely scenarios is that the blockchain connects the energy supplier directly with the energy consumer. Coordinating deadlines for reading the meter reading or laboriously filling out online or print forms is now a thing of the past. The industry is revolutionizing itself with the increasing use of smart meters. The blockchain is the next logical step.
The technology enables electricity providers to control their energy networks through smart contracts. These smart contracts signal to the system what transactions are necessary, how much energy has been consumed and how to regulate grid utilization to balance supply and demand. Smart Contracts can ensure that the right amount of energy is automatically delivered to the storage facility and that the correct consumption is billed to the private end user.
Billing – cryptocurrencies as means of payment of the future
If all energy flows are based on decentralized data storage and Smart Contracts ensure that network management is efficient and cost-saving, the next step is consumption billing.
The best scenario is that the smart meters extended with blockchain measure the amount of energy produced and consumed, while smart contracts trigger the billing of energy costs using cryptocurrency payments. Everything is fully automated and without effort for the end consumer.
Renewable Energies – Better Energy Management for Feeders
Renewable energies are becoming increasingly important. Private and commercial energy producers are making the energy sector increasingly decentralised and dynamic. This poses growing challenges for the grid. The multidirectional influences must be managed and the data and information of the many parties must be controlled. The goal in all processes is to avoid overloading or failures. If one reads this problem formulation it becomes clear fast that Blockchain represents a practical solution for these problems. The technology can help with the creation and recording of generation forecasts for the various power generators through its decentralized approach and can take over the network distribution in order to minimize fluctuations. Energy trading can also be done using cryptocurrencies. The first pilots have already steered the purchase and sale of energy generated by renewable energy resources.
However, the introduction of energy systems supported by blockchain technology is still a vision of the future. Even though many start-ups are working on the introduction of such systems, in many countries the basis for the digitalisation of the energy sector must first be created. New application scenarios can only be integrated if smart meters are sufficiently widespread and network management is digitised.
