Blockchain Technology In The Energy Market

Blockchain Technology In The Energy Market

Barely a day seems to pass by without a story about cryptocurrencies, bitcoin in particular, and how they could be the key to riches or the road to ruin. Regardless of the merits, or otherwise, of these digital currencies, what they have done is shine a light on the technology that underpins them: blockchain.

But what is blockchain? Well, according to the Wikipedia definition, it is

“an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.

For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.”

The decentralised nature, fault tolerance and inherent security are what has made blockchain so popular in the world of finance and digital currencies, but these qualities can also be very useful in other sectors, such as the energy market.

As we continue to move away from a few large centralised power stations, to distributed generation across the network it’s not hard to see the potential for a whole new way of operating. Local communities could create ‘energy islands’ using renewables backed up by storage and trade it amongst themselves using blockchain technology, fundamentally changing the energy market and the role of grid operators.

Or blockchain can be used to manage bottlenecks and curtailment by creating virtual powerlines through integrated batteries, as is being trialled in Germany.

Companies may find a way to aggregate generation assets and combine this with blockchain and cryptocurrencies to rip through the energy market in similar fashion to digital revolutions in other sectors.

Regardless of how change arrives it is, judging by the number of articles appearing on this topic, on its way.

There is even now an event dedicated to furthering these and other ideas – Electrify Europe is the world’s first conference and exhibition dedicated to the convergence underway between the power generation, transmission & distribution sectors, driven by digitalisation, decarbonisation, decentralisation and electrification.

Given the current interest, it seems certain that blockchain will scale. When it does, this will be a very interesting space to watch indeed.

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