Blockchain Use Cases In Energy
By AMCgroup on Altcoin Academy
The global economy projected to grow four-fold by 2050 and projections predict about a 70% increase in the demand for oil to fuel the growth. It means that CO2 output will rise by approximately 130% during that time unless significant changes to how we harvest and consume our energy are made.
Blockchain technology has the potential to transform the energy sector. While the blockchain is no cure-all for the enigmatic question of how to proceed into the future of energy, it has several use cases that, at least on the surface, appear able to help facilitate a responsible, productive mission for the production and consumption of energy going forward.
The energy industry has been consistently catalyzed by innovations including rooftop solar, electric vehicles, and smart metering. Now, the Enterprise Ethereum blockchain presents itself as the next emerging technology to spur growth in the energy sector through its smart contracts and systems interoperability.
Legacy energy sectors, such as oil and gas, and complex systems with multiple actors have also the opportunity to benefit from blockchain technology. Oil and gas companies are particularly concerned about privacy and trade secrets. These private blockchain networks offer data permissioning and selective consortium access to pre-approved parties. Private and consortium blockchains provide an interim solution until public blockchains can implement the necessary privacy features businesses demand.
What Are The Blockchain Use Cases In Energy? Let’s Read About This.
1. Impact On Peer-to-Peer Energy Trading
A peer-to-peer energy market is a shared network of individuals who trade and buy excess energy from other participants. A Blockchain In Energy report by Wood Makenzie shows that 59% of blockchain energy projects are building peer-to-peer energy markets. These energy markets benefit the masses because they reduce control from central authorities, such as wholesale entities.
By 2030, a projected $103 billion will have been invested in energy storage innovation. These investments are expected to be manifested as savings, with some figures stating that relatively modest gains in energy storage capacity could produce total savings in the $25 million–$50 million range for residential, commercial, and industrial consumers.
A digital, blockchain-based platform for tracking energy stores and facilitating transactions has been proposed, as its distributed ledger offers a reliable, cost-effective platform by which energy-trading peers can connect. In addition, as more and more countries reach energy parity? the cost of renewable energy becomes equal to or lower than traditional retail energy. Individuals who produce their own energy will have the ability to trade it with their neighbors and peers. The Australian-based company, Power Ledger, has connected communities to one another to create “microgrids.” Many blockchain energy companies imagine a future with larger and entirely distributed peer-to-peer grids.
2. Tokenize Energy
Energy is being wasted in over the world. For example, in the US, 71% of the energy expended in transportation is lost as waste, 66% of electricity is wasted, and 20% of the energy used in manufacturing is considered non-useful. All of us have a long way to go when it comes to utilizing more efficient ways of producing and consuming energy.
These alternate solutions include but not limited to renewables and demand-response utility programs, which direct energy along a grid-based on households’ unique needs and use times. One way to establish smarter systems of consumption is through the tokenization and trade of energy. Tokenizing energy so that it can be more easily exchanged between supplier and customer as well as through a customer-to-customer network would likely be an incentive for renewable energy source adoption, too.
Because renewable energy must be stored but experience diminishing returns, the ability for producers and consumers to trade amongst themselves based on varying supplies and demand would enhance the viability of non-traditional energy sources. Further, even non-sustainable energy could be plausibly tokenized and traded as a quantifiable asset, and the starting point of these possibilities is the tokenization of energy itself so that it can become a tradeable commodity with defined per-unit value.
3. Impact On Wholesale Electricity Distribution
Companies looking to implement blockchain technology into wholesale electricity distribution focus on connecting end-users with the grid. Blockchain technologies combined with IoT devices enables consumers to trade and purchase energy directly from the grid. By connecting users directly to the grid, blockchain allows users to buy energy from the grid at a cost they desire. The result is a more equitable and stable energy market with lower electricity costs.
Grid+ is a blockchain energy company focusing on wholesale energy distribution. This firm has identified retailers as the driving source of inefficiency in the consumer electricity market because of retailers own very little of the grid infrastructure.
4. Reduce And Track Carbon Emissions
Carbon dioxide (CO2) is responsible for an estimated 76% of greenhouse gas emissions, making it become the top adversary for environmentalists. Energy consumed in the domestic setting accounts for a substantial portion of carbon emissions. Carbon emissions currently total 35 billion square metric tons, and that figure is only increasing, projected to hit 40 billion metric tons around 2030.
The primary way to lessen the rate of increase is to track our personal and communal emissions and use that data to modify our behaviors for the better. The ability to tokenize energy credits using blockchain technology presents the opportunity for carbon offset credits to be more easily issued. These credits can be purchased by companies and individuals or used as a punitive measure to encourage adherence to emissions standards. This revenue is typically reinvested to reduce emissions in other ways, so fitting an interoperable, cost-effective system to further the mission of reducing carbon pollutants can only increase the amount available to reinvest in new environmental projects and technologies.
5. Impact On Electricity Data Management
Blockchain technology can provide consumers greater efficiency and control over their energy sources. In addition, data is often intentionally manipulated or unintentionally misreported and omitted.
Therefore, an immutable ledger provides secure and real-time updates of energy usage data. Various types of energy data include market prices, marginal costs, energy law compliance, and fuel prices.
In April of 2018, the Chilean National Energy Commission (CNE) announced it had launched a blockchain project? focused on energy. In the spirit of transparency, the CNE will allow the public to access the records of transactions and prices. The transparency of public blockchains further reduces the chances of monetary or data exploitation.
6. Microgrids
Traditional, centralized power grids now are known for inefficiency and massive energy losses. Well-researched estimates put energy losses due to resistance at 6–8%. These resistance-related losses can total as much as $19.5 billion annually. Additional losses can bump the total losses as high as 15% of net generation, with this figure accounting for more than $70 billion in losses every year.
Microgrids are aimed at remedying these losses, which result largely from the long distances electricity must travel. By localizing electric grids, more direct, concise systems could cut down on power loss and also take advantage of renewable energy sources’ self-sustaining properties. The distributed ledger technology that the blockchain utilizes could serve as the logical digital building block for users of these microgrids to monitor consumption and execute energy transactions.
7. Effect On The Oil And Gas Industry
The oil and gas industry is comprised of thousands of companies that are roughly split into three categories?: upstream, midstream, and downstream. The journey of one drop of resources can include hundreds of separate entities, companies, processes, and legal agreements, these processes are costly. Consequently, the implementation of blockchain technology in oil and gas trading can lower costs associated with the maintenance of various trading systems.
Furthermore, blockchain can also reduce costs associated with labor, data management, data visibility, settlement delays, and inter-system communication. BTL Group, an enterprise blockchain company, recently completed a pilot project with ENI, BP, and Wein Energie. The pilot demonstrated that the use of blockchain technology to facilitate and track gas trades reduced overall costs by 30–40%. The company plans to test the platform with other resources besides gas. Instead of building out a system for each commodity, blockchain enables the fast integration of new commodities by re-programming the original smart contract.
We hope our article is useful for anyone ready to join in this blockchain era. If you are interested in crypto, you- can join our exchange:
