5 Blockchain Applications that can Increase Efficiency in Energy Management Systems
The energy management sector is a thriving part of the vast energy industry that holds several opportunities for technological advancement. According to the Allied Market Research, technological innovation and the current energy efficiency capabilities can impact the market growth of the energy management systems in the coming years. (Source)
Blockchain technology, with its core features being decentralization, immutability, and transparency, has the potential to supplement technological innovation in energy management systems and provide solutions to several issues.
One of the biggest pain-points in this sector is the consumption of energy without enforceable regulation that has led to the detriment of the environment. The forthcoming natural disasters due to global warming and climate change will be devastating, and the energy sector has to reform and redefine the shifting gears within its system to address its consequent issues and focus its efforts on improving its efficiency.
For a humongous system that is widely adopted because of its potential to simplify and solve a system that is still faltering without efficient management methods, blockchain tech will provide the redemption it needs. Blockchain is a technology based on a distributed ledger system that is powered by peer-to-peer networks. By extension it is decentralized, i.e., it doesn’t have a centralized institution that mediates transactions, cutting out the now devalued middlemen. The energy sector can benefit greatly from its applications.
Here are five major applications of blockchain tech that can revitalize the energy sector with efficient energy management systems.
#1 Opening Doors to Small-Scale Players and Micro Grids
Energy management systems are mostly monopolized by large corporations and government projects. With the implementation of blockchain technology and its peer-to-peer network, smaller communities can manage their own energy supply. By extension, the employment of blockchain technology can also provide consumers to choose affordable energy mixes. This can further aid in saving energy, prevent the depletion of fuels, and keep the economic value of energy at par with the spending power of a certain community of consumers.
#2 Accountability in Carbon Credit Programs
With blockchain, we can ingrain accountability among institutions and corporations to control and potentially reduce their carbon footprint. Carbon credit programs are permits that country issues to organizations to produce a limited amount of carbon emissions. It also provides criteria where the permit can be passed onto other players in the same industry if an organization has released lesser amounts of carbon emissions than they signed up for. Blockchain technology can effectively systemize and map out this process and keep the general public in the loop with a transparent structure.
#3 Capitalizing Renewable Energy with Tokens
Using blockchain, players can tokenize help renewable energy producers to build networks with investors and the general public efficiently. Here, consumers get a chance to pay for their energy consumption up front. In this sense, the middleman is eliminated and there is a direct relationship between producers and consumers. This will considerably cut costs and give investors and consumers end-to-end information about the supply.
#4 Accelerating the IoT (Internet of Things) Technology for Efficient Energy Management Systems
Blockchain technology expedites the adoption of IoT technology by providing a better platform for its function. IoT is a technology that is a network of connected devices (smart devices, laptops, etc) that can enable communications with one another based on an IP address for Internet connectivity. Its use cases are diverse, and with blockchain technology, we can help build smarter and efficient homes.
With this set in place, people can manage energy consumption more efficiently as individuals. Furthermore, it opens up options for companies to capitalize on IoT for better energy saving initiatives.
#5 Enabling Virtual Power Plants (VPP)
VPPs are clusters of energy generators and storage systems that are aggregated and controlled in an intelligent manner. Blockchain technology can help achieve this efficiently. It can help to monitor remotely and control the functions of dispersed assets; this includes tracking the movement of physical assets along the supply chain as well. This data can further be recorded as end-to-end information on a transparent system.
