5 revolutionary use cases of blockchain technology for the energy sector in 2023
The energy sector is among those industries that have already proven their positive link to blockchain technology, allowing for a variety of synergy effects that provide advantages to a variety of stakeholders. Many believe that it is only a matter of time before some of the most notable use cases of blockchain in the sector become standard and are a must for the future of the gigantic energy industry.
In this article, we will take a look at 5 revolutionary use cases of blockchain technology for the energy industry in 2023 and beyond.
One of the most notable advantages and revolutionary properties of blockchain technology is the way data is organized and transmitted. This results in some groundbreaking advantages for end consumers, especially markets suffering from monopols and intransparent structures.
Smart meters are not a new concept to the energy sector – these allow for the real-time reporting of electricity consumption, making them a much more flexible and preferred tool than older traditional systems. The data streamlined through smart meters goes through several intermediaries that provide the needed data infrastructure before it reaches the electricity supplier, which can affect the integrity of the information, as it is controlled by the counterparties receiving it. These informational asymmetries could occur unknowingly to most stakeholders, resulting in intransparent reporting of consumption and potentially higher costs for the end user or the utility provider.
With distributed ledgers, electricity consumption data is not changeable and can be accessed directly by anyone at any time. The inherent disintermediation that blockchain technology possesses creates the conditions that ultimately allow the utility company to directly get the data from the consumer. At the same time, the same company cannot change this data at their discretion, which makes overcharging impossible. The ultimate result is a fair market with as little possibility for fraud and informational imbalances as possible.
Improved supply chains
Blockchain technology is well-known for providing multiple advantages when it comes to improving the efficiency of supply chains. Especially in the energy industry, the end-to-end process of energy generation – from acquiring the raw materials used to generate it to delivering the energy to the end user – is extremely complex. The higher the number of intermediary parties, the more prominent inefficiencies become and the higher the costs incurred alongside the supply chain become.
Blockchain technology can allow energy companies to gain more insight about the supply chain of their product and optimize it, which will reduce their cost and lower the prices for the end consumers, while also ensuring higher environmental efficiency by the improved accountability.
Empowering P2P energy markets
Peer-to-Peer energy trading was among the first most notable concepts that were suggested during the early days of the adoption of blockchain technology. In fact, nearly 60% of projects in the energy sector were focused specifically on leveraging the potential of the technology for energy trading.
With the help of blockchain, the possibility to create P2P marketplaces for energy trading became a reality. Traditionally, excess energy produced by households and businesses through renewable energy installations or other means can be fed back to the grid, for which the consumer receives royalties. A blockchain-based marketplace uses smart contracts, which allow this energy to be transferred from one entity to another in a transparent and immutable way, resulting in better conditions for both buyers and sellers by removing intermediary parties that would otherwise impose high fees and intransparent conditions.
According to Power-Technology, microgrids are expected to reach 5.8 billion USD by 2025, making them a new emerging subsector of the gigantic energy industry with a lot of potential.
Conventional large scale power generation facilities have the downside of having to transport the power to the end consumers, which results in very high costs and a lot of wasted energy.
Microgrids are multiple, smaller power sources that are dispersed closer to the end consumers, allowing for a more efficient distribution. The concept can solve the issue with the high cost of maintaining the infrastructure used to deliver the power from generators to the end consumers. Energy can be traded locally, thereby allowing energy consumers to save up to 40% of the costs. The concept is also closely related to P2P energy trading we mentioned earlier.
Blockchain technology offers a variety of synergy effects with the renewable energy sector – from transparent trading of Renewable Energy Certificates (RECs) that allows for instant validation of REC transactions and prevention of double-spending to rewards for production and usage of renewable energy. The renewable energy sector is also closely related to energy trading and microgrids we mentioned earlier.
There are multiple additional synergy effects that are yet to be explored. One project is diving deep into the endless possibilities of blockchain in the energy sector and focuses specifically on democratizing clean energy generation.
Decarbonice – blockchain meets renewables
Decarbonice is a novel project in the blockchain space with the mission of providing every household and business to produce their own green energy independently, at low cost and with as little risk as possible. Investors can obtain an installation for renewable energy generation such as a high quality heat pump or solar panels against a small collateral of the native deflationary PNE token. After a certain timeframe has passed and they have produced a predefined amount of clean energy, the investors get to keep the renewable energy installations and receive back their locked tokens. Decarbonice sustains its business model from the royalties of the excess energy produced and fed back to the grid, as well as the CO2 certificates that the company will be eligible for.
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If you are interested in learning more about Decarbonice and their disruptive model, visit www.decarbonice.io and consider subscribing for their newsletter to be up to date with everything happening around the project.
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