Blockchain in Energy — Super-powered Processes?
Blockchain and distributed ledger technologies are key enablers in energy transition.
The energy market used to be an oligopoly of different energy providers. Making agreements and establishing trust relationships required some time but was doable. Today, there are more players in our grid than ever before. With wind power and PV plants on small houses, the industry has become more decentralized.
Yet, all these players have to work together in collaborative processes without a single central authority resolving conflict. The energy sector needs a single truth without a single source. And this is where blockchain comes in.
In the following sections, we discuss three prominent use cases of blockchain in the energy domain and its impacts.
Wholesale Electricity Distribution
Focusing on end-users, blockchain enables a full audit trail of electricty generation and consumption. In that way, consumers can become direct actors in the grid.
This is possible through a combination of blockchain and IoT devices. These IoT devices act as “orcales” in a distributed network. They can verify facts and compare the state of the real-world to the state replicated on the blockchain, turning energy into a cyber-physical asset.
Peer-to-Peer Energy Trading
On the B2B side, blockchain enables peer-to-peer energy markets. A peer-to-peer energy market can be defined as a shared network of individuals who trade and buy excess energy from other participants. Energy markets benefit from the technology because they can reduce the control from central authorities.
The Energy Web Foundation has been building a technology stack that they call “EW-DOS” that enables different solutions in energy trading. They run a public permissioned enterprise blockchain infrastructure that can be used by different parties to create their own applications.
Electricity Data Management
Today’s grids are facing high loads and constant challenges to maintain the health of the grid and optimize its operations. This requires analysis and prediction based on data from a variety of different companies and organizations.
Blockchain technology can help to collaborate with other companies on sensitive data. Solutions like KnowledgeX enable data processing across company boundaries without disclosing data to others. This uses blockchain (to create an end-to-end audit trail of data processing authorization), trusted execution environments (to execute data processing without the possibility of data leakage), and decentralized cloud computing (for orchestration).
A brave new World?
Implementing these use cases is challenging. Yet, the challenges are mostly on the collaboration and system integration levels. The technical foundations with blockchain are in 2022 there and ready to be implemented. Governance aspects for typical enterprise networks are one of the critical things factors for success.
