Blockchain: the Revolution in the Energy Sector

In the last years, the Blockchain technology that has the potential to change completely the way we deal with money is becoming more popular and its application is gaining space in a variety of sectors. But what is Blockchain?

Photo by André François McKenzie on Unsplash

Blockchain is a peer-to-peer network that records data (block) secured and attached to each other (chain) and maintain a sequence of information using cryptography, all in a cluster of computers not owned by one company. It was introduced by a pseudonym called Satoshi Nakamoto in the white paper “Bitcoin: A Peer-to-Peer Electronic Cash System” published on October 31st 2008. Until now (2020) it is not known is this pseudonym belongs to a person, a group or a company, and many speculations were made about it.

Check this publication: How Artificial Intelligence is changing the Energy Sector

This technology was created with the intention of changing the monetary system by replacing the traditional centralized transaction system, represented by a bank, and substituting it by a distributed transaction system, represented by a cluster of computers. In this new system, each transaction is made directly from user to user, a peer-to-peer network, and not through a bank. The concept of this technology is explained in the next image

Centralized and distributed transactional platforms: a single trusted authority manages the ledger as opposed to every member holding a copy of the ledger. Source: Andoni et al. (2019)

Each transaction is a block, and it is attached to the last transaction of the system when it is validated, creating a blockchain of transactions. This ledge is shared and immutable, and it can be accessed by anyone, so it is a democratic network. It works through smart contracts, computer protocols that facilitate, verify and enforces performance of credible transactions without a centralized entity.

The report from PwC called “Building Block(chain)s for a Better Planet” about application of blockchain explains how it works.

In the energy sector, Blockchain has many applications such as energy trading, wholesale electricity distribution, data management, utility providers, electric vehicles, authentication of certificates, climate change and much more.

Back in 2017, the Energy Web was founded, a global non-profit organisation focused on the development of blockchain and decentralized technologies. This group builds core infrastructure and shared technology, speeds the adoption of commercial solutions and fosters the community to a sustainable ecosystem around Energy Web.

Now that we have a good idea of what is blockchain, I would like to speak about Ethereum.


Ethereum is am open source platform for decentralized applications capable to execute smart contracts and decentralized applications with blockchain technology. It has a decentralized virtual machine, the Ethereum Virtual Machine that executes scripts in an international network of public nodes. It has its own cryptocurrency called Ether (ETH).

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With Ethereum you can develop new applications with all the security provided by the blockchain technology.

Applications in the Energy Sector

Let’s take a look in some projects that apply blockchain technology in the energy sector.

Power Ledger

Power Ledger is a tech startup based in Perth, Australia who developed the world first blockchain enabled energy trading platform. The user who has solar panels for example, can excess of energy to the neighbor or even store it in batteries and sell it on the peak price. The company has several applications of blockchain applied to the energy sector.


GridPlus, based in Texas, US, is one example of how Blockchain is affecting the distribution network.

The intermediation between the final user and the electricity supplier is not necessary with this technology, eliminating the fees charges by the intermediator (who does not add any value to the supply chain). It is reducing the amount of money that the final user is paying for the electricity and it improving the dynamics of the grid.


Blockchain is being applied in Electric Vehicles (EV) industry. One exampe is Smart&Charge, a platform to connect EV drivers and EV charging stations, all running with Ethereum and smart contracts.

Members of this network have information on prices, transactions and provides incentives to have a private EV charging station, with the real possibility of making profit by selling the electricity to the EV driver.


Blockchain is a technology that is allowing the development of distributed systems in many sectors, in special the financial and energy sectors. In the first one, blockchain is removing the necessity of a central bank to make transactions, with a much more reliable way of checking and validating informations. In the energy sector, blockchain is connecting final energy user directly to the utility, reducing costs for both by removing the intermediator of the transaction. We saw other applications such as energy trading between neighbors and market place for EV users and EV charging station owners.

If you are interested about the blockchain technology, you can get involved in many ways. This technology is attractive for entrepreneurs, developers and individuals who want to save money or even make some small investments. You can google and start your own research and check the many applications that fits into your interest.

In this article we passed through the following topics of Blockchain:

  1. Definition and origins;
  2. Main development platform;
  3. Applications in the energy sector;
  4. Conclusions;

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