“Big Energy” is one of the aspects of modern industrial world that never seemed to be all that promising for the blockchain. TDL has entered the scene on a wave of the crypto frenzy, but it was out of it just as fast - just because maintenance costs for running both the network and consensus algorithm were far too high to keep it up and running outside of the theoretical field.
It seemed that crypto industry needs energy networks, not the other way around.
But now the situation has changed: the rise of privately or household generated energy, and the overall increase in energy effectiveness made blockchain ready for it’s “triumphant” return.
It all started back in 2016 in Brooklyn. Out there local crypto enthusiast sold his excess energy to his neighbor via smart contract on the Ethereum blockchain. However, that was just a starter.
In 2017 alone, the amount of blockchain centered energy startups have reached 120 companies, while the nascent industry managed to attract more than 320$ mln, And their number is just growing. Moreover, we are not talking about “crypto-anarchists” or “Digital Nomads” that fight the system and try to achieve full self-sufficiency. We are talking about industrial “bigwigs” like Japanese TEPCO. Japanese energy giant is intrigued by the possible use cases for the blockchain.
“With the blockchain technology the whole energy market could be changed. The entire model that the energy market is running right now could be changed. Tokenization of the market is the future”, - thinks blockchain consultant from Investment S.Krystian Jabłoński.
“The model of energy industry itself can be improved. Tokenization of the market is the future!
With the access to the blockchain tech, the whole industry has a potential to change the entire energy industry. Renewable energy or excess power allows anyone to become energetically self-sufficient or even sell their excess energy”.
Distributed ledger technologies, despite that fact that they are somewhat “young” in this field, already managed to form out solid trends in the energy industry. That's microgrids, intellectual energy storage and use of alternative energy. Energy companies are getting new instruments, while the industry itself can change under the influence of blockchain.
The main benefit is simple - all parties involved in the energy market are getting rid of the “middleman.” Consumers can contact the energy producer directly, switch their tariffs without a sweat and perform all transaction fast and easy. This is one of the main reasons why energy companies are eager to start using blockchain more and more.
Another aspect of the blockchain fueled energy revolution is the seamless integration of renewable energy sources in our daily lives. That's solar power, projects centered on the gathering and distribution of energy, and many other things that will tip the scale in their favor while lowering the price of the power tenfold.
Don Ham VP of Refresh Smart Home
The cost of alternative energy, namely renewable energy has hit a tipping point where it is now cheaper than fossil fuel based energy. We will soon start to see a massive shift that will make fossil fuel energy obsolete in the next 20+ years.
However, here we can see one of the most significant flaws in this real-life implementation of the blockchain. It heavily depends on the development of the implementation of the smart technologies and their rates of evolution. Simply put - the industry needs a broadband connection to work right, but blockchain can only offer a digital analog of telegraphy.
Meanwhile simple users are facing another issue: looming need of the smart home implementation. Right now it’s either too expensive or requires technical skills that they are lacking.
So, in the end, we can come up with the three significant problems of the blockchain in the electric management: lack of infrastructure, unclear legal boundaries and blockchain's fairly young age.
Infrastructure that is required to harness all benefits of the blockchain fully is not omnipresent. A lot of people have a smart electric kettle that will heat up the water to ideal temperature, but not that many people can sport having a full smart house system that controls heating, water, and energy distribution.
Uncertain points and gray areas in the legal framework is another adversary that remains untamed. The chance of very real reputational and financial losses caused by a malfunction is stopping many companies from putting their ideas in motion. It’s way safer to wait for the VC investors that will buy them out.
And finally, one of the biggest, but only temporary issues - it’s the age of the industry. Basically - blockchain projects in the energy industry are making their baby steps, and you can’t predict how it’s going to work in the nearest future.
Potential of the blockchain in the energy industry is nearly infinite. Researches in the field of energy efficiency are almost undoubtedly revolutionary. But it’s evident that this “revolution” is coming only after the evolution of the blockchain as technology itself.