Blockchain is becoming more and more beneficial to industries around the globe. We are now also starting to see the large potential it has within the energy sector.
Even though industry experts believe full-scale adoption may take time, that is not to say there are no blockchain applications in the energy sector.
As we know from many reports and evidence, blockchain technology has a large range of uses. Blockchain has impacted the financial sector, the retail sector, and many more. It is only a matter of time before blockchain technology is being used in every industry.
Blockchain is doing a considerable amount to make the energy sector better, but as always, there are multiple ways it can improve.
Potential blockchain applications
Blockchain has the power to change the market in the energy sector. Because of its decentralised nature, blockchain is able to take away the rates that are fixed to centralised bodies. This is because electricity rates are provided by centralised authorities, meaning they are in charge of the large costs.
Once blockchain has infiltrated the market, the electricity tariffs will begin to act like tradeable commodities which will respond to the supply signals in the electricity market. The benefit of this is that consumers will have a bundle of choices when choosing their electricity service providers. This means that the consumer will be able to scan through the blockchain listings to find the best deals to suit them.
Peer-to-peer trading platforms
If the energy sector fully embraces the decentralised blockchain technology, consumers can start to trade in the P2P market. The consumer can benefit massively from this as electricity can be used as a tradeable asset. Blockchain will provide advantages such as network transparency and low transaction costs.
There are blockchain-based companies already working to create solutions that tailor a peer-to-peer electricity trading market. Companies such as Power Ledger and Electron are of the first to be implementing this P2P market.
Microgrids, which are a localised group of electricity sources, are also appearing in cities such as New York and Sydney. These microgrids allow a specific area to trade in electricity. With natural disasters like floods, earthquakes, and hurricanes happening so regularly, backup plans need to be put in place, and that’s what microgrids offer. They are able to sustain a community or city with enough power to function until the main grid is back online.
As with all industries, blockchain has the capacity to create efficient solutions. Because blockchain is transparent, it can support the integration of data with the cloud. This allows data to be collected, examined, and stored in a safe database for reconciliation purposes.
Because of how the technology works, it creates transparency throughout many instances and removes the need for intermediaries. This benefits the energy sector as emission records can be digitised, validated, and securely recorded on the flowing platform of the blockchain.
This provides the energy sector with the massive benefit of having a smoother, more efficient system. Blockchain also stops the unnecessary need for paper trails within organisations. Because of this, data will never need to be reconciled separately again as it will all be reviewed on the blockchain’s distributed ledger.
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