Energy is said to be the ability to do work and the power derived from the utilization of physical or chemical resources, especially to provide light and heat or to work machines. Energy has become as important to man as the food he eats and air he breathes as its needed for his daily endeavours.
The use of blockchain keeps breaking boundaries and Professionals has been able to analyse the use of blockchain in Energy use. Here are their views;
So what are the use cases of Blockchain in Energy?
Energy-specific blockchain use cases, one of the most ambitious crypto economic projects is Eloncity, which is working to decentralize the electrical grid infrastructure and energy monopolies by replacing them with a hierarchy of blockchain-enabled microgrids. Those microgrids allow communities to store, trade and consume locally-generated renewable energy. The system aims to achieve supply and demand balance within — and across — communities, reducing the need for very expensive peak generation power and the power transmission fees that plague the network today.
How Decentralized Energy Works
Households need to trade frequently in order to establish an efficient energy market. As the trading volume grows geometrically with the number of households in the network, the frequency of trading, which we estimate to be millions of transactions per second in a typical country, could exceed the capacity of any blockchain. Fortunately, most of the energy trading also is limited within microgrids; that is, most trading happens between stable groups of households in the same neighbourhood or community. That allows us to scale the network by building side chains, each representing a microgrid.
Where Plasma Meets Electricity
Eloncity is partnering with CyberMiles to build its infrastructure on the high-performance CyberMiles public blockchain. And like CyberMiles, Eloncity aims to build a highly-optimized virtual machine that is specific to its particular application protocol. In this case, CyberMiles and Eloncity are collaborating to develop a customized Plasma implementation that allows for fast, secure energy trading based on the Eloncity protocol. The goal is to automate much of the verification workload and reduce the complexity of crypto economic games.
Energy liberalization in Japan (the main player is TEPCO) is a constantly evolving project between the government and major energy corporations. Currently, monopolies have established massive infrastructures to maintain the energy market. Current decentralized models from existing blockchain PoCs would forgo this infrastructure with microgrids, allowing average households and businesses to sell energy on a P2P marketplace; however, these microgrids are severely limited in reach and can barely span a block, meaning your P2P market consists solely of neighbours. Even if the issue of reach were overcome, the second biggest issue is that millions of consumers will be accessing this P2P marketplace, and most blockchain solutions can barely muster a few thousand transactions per second (TPS), thus creating a slow and user-unfriendly marketplace.
BEXAM changes this by integrating its technology (40 million TPS and 0.2s block time) in a two-tier approach to this market:
Tier 1: Decentralize the existing databases with a private blockchain
- Electricity production data, including electricity produced by home solar panels, will be authenticated and verified through smart meters on the blockchain.
- Blockchain technology will protect user data and corporate data from cyber attacks
Tier 2: Create a public blockchain-based P2P marketplace (which intertwines and communicates with the private chain)
- Data stored in the database from Tier 1 can connect to the P2P marketplace, which is built on the public chain hosted on BEXAM’s platform.
- Marketplace users are protected from hacks and security threats, thereby instilling a sense of trust on the platform.
The energy companies would maintain their current infrastructure to deliver the energy, but also expand opportunities so that these companies are not retaining and dominating the market. Our goal is to see a realistic implementation of blockchain within this emerging obstacle in the energy sector, with further improvements to follow.
Energy: In the energy industry, several blockchain companies (e.g. Power Ledger, SunContract, etc.) are looking to disrupt the utility industry by supporting microgrids of solar panel systems whereby neighbours can supply and buy energy from each other. The concept is that if you have solar panels on your home, you may produce excess electricity. Nowadays, you can sell that back to your local utility at a price set by the local utility.
Using a blockchain-based solution, you will soon be able to sell your excess power to your neighbours. And, if you don’t have solar panels on your roof, you will be able to buy power from your neighbour that does. This sounds like a great idea to break the lock the utility company has on buying power at the prices they set. We will now have the freedom to cut out the middleman and support our neighbours. It feels almost utopian.
Except for one thing. What about that pricing?
It turns out that in most parts of the world, the utility company produces energy more cost-effectively than local solar does. The implications for the home with the excess solar is that your neighbours won’t want to buy power from you because your power is more expensive than the utility’s power. Until and unless local solar production pricing drops significantly, we just shot a huge hole in this business plan.
The idea of a market for local solar might work, but putting it on the blockchain isn’t enough. The market forces of power play a much bigger role. Evaluate the likelihood of investing in any idea by understanding the critical market forces first.
Blockchain facilitates environmental accountability by recording information about carbon emissions and measuring the production of renewable or clean energy. This is achieved by tokenizing available information. Currently, a significant amount of environmental and sustainability data is unverified, but blockchain can assure data immutability and integrity.
For example, Ambrosus is working on connecting the blockchain to solar panels and windmills in order to generate cryptographically secure data about the energy being produced. The data is provided by sensors and validated by the blockchain, thus adding value and integrity. Preventing environmental degradation is another area in which blockchain technology can play a part.
Environmental degradation takes place primarily due to inappropriate ownership of land and natural resources.
In many countries, natural resources and land are seized from the people and communities who take good care of it and used instead for industrial development. However, with blockchain enabling the better protection of land ownership registries and other information about resource ownership we can expect land and environment used to be more closely monitored and these invaluable resources to be better protected
Senior Account Executive
Blockchain has the potential to disrupt large chunks of the value chain in the energy and power generation sector. Indeed, the decentralized Blockchain model may make some energy traders, metering companies or other trusted Third Parties redundant in the energy ecosystem. Today, there are more than 150 startups and larger companies working on the development of blockchain application in the energy sector.
A large part (> 50%) of the investigated use case target Peer-to-peer trading of electricity and the development of smart trading platforms to shortcut third parties in the wholesale market or to develop live electricity smart contract management applications. Many startups are also investigating use cases in the Electric vehicle sector (charging/sharing), certificate of origins follow-up as well as IoT integration.
Behind those small startups, large utilities and industrial players like Tepco, Innogy, Engie and many strat to be involved in those use cases assessment.
If Europe remains the leader in the blockchain for Energy arena (esp. in Germany and the Netherlands), many companies developed in the US as well over the last 2-3 years and are gaining momentum.
Investment by VC and large players are already significant (> $300M in 2017) and I believe that we will enter in a phase of recomposition, with first mergers, acquisitions and failures of key startups in the sector. Major drivers for the development of the sector are the evolution of local regulations as well as the adoption of this technology by prosumers/utilities, one issue influencing strongly the other.
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