There are a number of blockchain initiatives that have so much hype backing them that it can be difficult to tell whether the project is actually disruptive, or just a ploy for funding. Some are so ridiculous, in fact, that it makes the entire industry seem like a joke.
You can now order high quality sand, have a shoe fitted online with 3D technology, or even send your prayers on ‘the blockchain.’
Sifting through the thousands of potential applications for blockchain tech can be a headache. Not only is it a headache, it’s an outright waste of resources that could impact the scalability of the Ethereum blockchain and derail the efforts of bigger, and more game-changing ideas in the space.
In 2018, the global market demand for blockchain tech is expected to reach $2.1 billion, more than double that of 2017. Leading this charge are the finance and banking industries, but the energy sector is beginning to realize the benefits of the technology, as well.
While Big Oil has already formed its own blockchain consortium to revamp its trading platforms, major utilities companies seem to be following in its footsteps, however the movement in the utilities sector has more humble beginnings.
Back in 2016, one of the first companies to venture into the world of blockchain energy was LO3 Energy, a New York based peer-to-peer electricity sharing platform.
The company has successfully created micro-grids in New York, Germany, and South Australia, allowing communities to create an eco-system to collect data and trade energy. Because the energy is created locally through green mediums such as wind or solar power, and then transacted locally through LO3’s application, the community’s grid is more sustainable and less susceptible to issues a traditional power grid might face.
Related: Can Saudi Arabia Afford Its Megaprojects?
The project has even teamed up with European manufacturing giant, Siemens to expand into larger markets. Currently, L03 is looking to scale out its micro-grid idea into more communities throughout the world, seeking new partnerships with local utilities providers.
As Europe races to go green, and to diversify its energy sources away from Russian influence, companies are banding together to stay ahead of the shake-up.
One company, in particular, Ponton, began experimenting with blockchain technology in 2016, and since has created an alliance with 39 of the EU’s largest oil, gas, and energy traders, including Statoil, Engie, and Total.
These trading firms have come together to create Enerchain, a blockchain platform that facilitates peer-to-peer trading in the wholesale market, supporting spot trades, forward trades, load curves, and more, complete with physical delivery of the products.
Enerchain finished its proof of concept in 2017 and will be ready to launch on a small-to-medium scale within months. From building new infrastructure, to regulations catching up with evolving technology, however, it still faces a number of hurdles when moving into larger markets.
Despite the challenges, however, sentiment is high, and Enerchain is miles ahead of similar startups who are years away from a working product.
Ponton’s managing director, Michael Merz, noted: “Publishing orders and transactions via blockchain can replace trading via brokers,” adding, “We have developed an order execution process that works just like a typical OTC (over-the-counter) market front end.”
Indeed, the technology offers a new realm of opportunities for energy markets. While the finance industry is bogged down by scaling limitations, energy trades are simpler and occur at a slower rate, compared to equities or currency trades which could have thousands or tens of thousands of trades per second.
Research firm Trend Research of Bremen has noted that over 80 percent of energy companies are looking to integrate blockchain technology into their operations, and local, small-scale state utilities are no exception.
Not Just for Trading
Outside of trading, there are other applications for the technology being testing within the energy sector.
Chile has announced that it is using Ethereum’s blockchain to monitor and record energy statistics within the country. The National Energy Commission (Comisión Nacional de Energía de Chile) noted that the use of Ethereum’s public ledger provides an alternative to traditional, centralized method of data storage, allowing the information collected to be stored across multiple nodes as opposed to a single database.
Andrés Romero, the CNE’s executive secretary explained: “The National Energy Commission has decided to join this innovative technology and we have decided to use blockchain as a digital notary, which will allow us to certify that the information we provide in the open data portal has not been altered or modified and left unalterable record of its existence.”
Related: Is Saudi Arabia Losing Its Asian Oil Market Share?
Other initiatives seek to transform the entire supply and demand chain.
Burlington, Vermont aims to be the first municipal utility to integrate blockchain technology into their grid on a large scale. The small New England town hopes the technology will be able to facilitate the integration and distribution of energy from multiple sources in real time.
Killian Tobin, CEO of Omega Grid, the city’s partner in its blockchain ambitions, noted: “We’re starting with a small utility and some micro-grids, but we want to deploy on an entire grid.”
The Future of Blockchain Utilities
Though many of these projects are still in their early stages, the implications of blockchain integration are vast. From local supply-and-demand efforts or micro-grid peer-to-peer energy transactions, to large scale energy trading marketplaces, utilities are undergoing a massive transformation.
On a smaller scale, the technology allows a new type of energy transactions in which individuals can band together to reduce their dependence on local profit driven energy cartels while creating a new level of grid security.
On a larger scale, countries, large cities, and corporations can work together to in what could amount to significant geopolitical power shifts. If Europe is able to truly harness its own green resources, it could reduce its dependence on foreign oil and gas.
While a number of companies are churring out novelty tokens and sending digital cats over the blockchain, rest assured, there are still tremendous benefits to the technology.
The integration of blockchain technology into the energy sector marks a literal shift in power that is sure to change everything.
By Michael Kern via Crypto Insider
More Top Reads From Oilprice.com:
- Venezuelan Oil Enters The Disaster Zone
- Oil Prices Rise On Crude, Gasoline Inventory Draw
- Is Saudi Arabia Losing Its Asian Oil Market Share?