Energy is perhaps the foremost issue of our time. Understanding how blockchain can help ease present and future pain points in the energy sector is critical.
One apparent benefit of blockchain in energy is convenience. The appeal of peer-to-peer services like Venmo and Airbnb are self-evident — they cut out middlemen and reduce the cost of doing business. It turns out that people like paying less for a better experience . Who knew?
It comes as no surprise that the majority of startups using blockchain for energy are channeling the peer-to-peer economy. The exchange of excess energy is a win-win proposition. Households and businesses with energy to burn can recoup some of their utility costs, while those in need can pay a reasonable price for more energy when they need it. Exploring the viability of this peer-to-peer energy trading marketplace is a noteworthy trend in blockchain applications.
Investments continue to flood in for causes other than P2P energy trading as well. A microgrid stationed in Brooklyn, NY give us a glimpse into the future of energy collectives. Others are exploring how the automation and decentralization of blockchain technology could improve energy purchasing processes.
Energy regulations are always evolving. New rules will likely require strategic pivots by innovators in the space. As companies gain ground ahead of competitors, consolidations and corporate failures will become increasingly common. It doesn’t take an industry insider to see these trends, but seeing the nuts and bolts of the energy sector is a huge advantage.
Here’s what the experts say about the trends shaping the future of energy:
1. Vincent Manier, CFO of ENGIE Insight
“Blockchain presents a unique opportunity to record and transform carbon reporting. By allowing for better data control across organizations and their suppliers, businesses can accurately track the massive data inputs that inform the carbon emissions analysis and benchmarks. This heightened visibility and traceability will drive process improvements for carbon reporting and will help set standards.”
2. François Le Scornet, President of Carbonexit Consulting
“We will see an acceleration of use case testing with support from large utilities. In addition, investments will continue to flow towards the most promising startups and I believe that we will start to see the very first failures and consolidations as well. In the blockchain sector in general, regulations will be rolled out in some countries and that will definitely influence the business models that may be applicable in the blockchain energy sector.”
3. Dr. Michael Yuan, Co-founder and Chief Scientist of The CyberMiles Foundation
“Layer 2 networks, e.g. plasma and state channels. State channels are lightweight in the sense that each channel transaction is of the same type. It’s easy to design an automated computation solution to validate transactions. In a payment channel, all transactions must be signed by both sender and recipient. When a dispute arises later, the computer code in the smart contract can easily tell which party is lying — the last transaction with valid double signatures always wins. The goal is to automate much of the verification workload and reduce the complexity of crypto-economic games.”
4. Dr. Mervyn Maistry, CEO and Founder of Konfidio
“While there is a lot of positive experimentation within billing, energy certification and load balancing for microgrids; two thirds of blockchain energy projects are currently working on P2P electricity trading. The goal of these projects is to allow individuals and organizations to trade their excess energy in a decentralized fashion, without going through unnecessary middlemen. Blockchain originally emerged from the P2P community, so we expect this trend to continue in the next years.”
5. Le-el D. Sinai, Associate, Reed Smith
“We are likely to see the expanded use of distributed ledger technology and smart contract technology to allow energy prosumers to maximize the economics of peer-peer energy trading. Whether Brooklyn’s solar microgrid is a microcosm of the future of end-user energy trading remains to be seen. However, depending on both scalability and regulatory viability, the success of this model is a useful proof-of-concept for the nascent communion of blockchain and the energy market.”
6. Buck B. Endemann, Partner, K&L Gates
“Partnerships. In order to move into the pilot phase and beyond, energy blockchain companies (like LO3 Energy and the Energy Web Foundation) will partner with incumbent utilities and established energy market participants to address narrowly-tailored and specific use cases. However, Europe will continue to outpace the United States in the development of viable energy blockchain solutions due in part to increased government and regulatory participation and, in some cases, streamlined regulatory regimes.”
7. Robert Godes, Founder, President and CTO of Brillouin Energy Corporation
“The trend that will affect all industries looking at blockchain is the scalability trend. There are numerous initiatives underway to scale blockchain to a level needed to serve industries. None have succeeded yet in providing scale without sacrificing security or decentralization or some other key component of blockchain.”
8. Assaf Ben-Or, CEO and Founder of Greeneum
“The number one trend will be the implementation and experimentation of peer-to-peer (P2P) energy trading both on the local and global scale. The transition to decentralized, efficient and renewable energy will be the big thing for 2019. We will see evidence of more pilots and case studies trying different approaches to meet that objective.
Many companies will be more open minded to implement these new solutions and check how the market reacts with it. Utilities and energy companies in Europe, US and elsewhere will change their traditional business model for new ones. Having the growing need for energy sources in distant areas and lack of infrastructure will push the emerging market to implement microgrids and secure ways to monitor and manage the energy supply chain.”
9. Braden Perry, Litigation, Regulatory and Government Investigations Attorney with Kennyhertz Perry
“In the near future, renewable energy credit trading will likely be one of the biggest trends due to the complexities inherent in the system and the potential for double-counting. Peer-to-peer energy trading and uses in distributed energy resources also have significant potential.”
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