Greenhouse gases, meet your match. The blockchain could be a potent asset in the fight against environmental degradation due to non-renewable energy sources.
Blockchain could play a role in the exchange of carbon credits, for one. In the same way that the technology could facilitate the exchange of energy, it could allow individuals and entities to exchange carbon credits where such assets are required. This could directly facilitate further adoption of renewable energy sources.
While we’re talking carbon, consider what blockchain ledgers could do for emissions reporting. A unified, standardized platform for reporting carbon emissions would go a long way towards maintaining corporate accountability. As blockchain-powered platforms provide added value, we could also see the merger of giant utility companies with small blockchain startups.
One expert likens the adoption of blockchain for energy to digital asset trading. People viewed it skeptically at first. But as major benefits like efficiency, convenience, and savings cropped up, the energy industry embraced it. Blockchain may have the same effect for energy trading, carbon credit issuance, and emissions reporting.
Now let’s hear what the experts have to say.
1. Dr. Mervyn Maistry, CEO and Founder of Konfidio
“Blockchain promises to transform the energy industry into a multi-sided platform economy where the focus is on the matching of, and the data exchange between, different market actors and the acceleration of clean energy use. Blockchain can provide safe and conflict-free energy exchange within our local communities.”
2. Binu Parthan, Principal Consultant at Sustainable Energy Associates
“There is a significant opportunity offered by blockchain/distributed ledger technologies that will primarily benefit the energy consumers, especially those that also generate energy (solar rooftops).
Blockchain could bring down the cost of electricity through smart contracts, smart-metering and billing, self-execution and a reduction in transaction costs.
It will also encourage energy efficiency, demand-side/supply-side management and higher levels of renewable energy use, thereby supporting climate action.”
3. François Le Scornet, President of Carbonexit Consulting
“Blockchain has the power to change the face of the energy sector because it can support an increasingly decarbonized, decentralized and digitized energy sector. One shouldn’t think that this is a panacea, though.
The most interesting use cases need to be properly selected. They include processes with many stakeholders from different organizations, involving trusted third parties that currently slow the process or increase costs.
You have 3 possibilities: Many activities are not a proper fit for blockchain and there will be limited or no impact. For other processes, blockchain will sometimes support existing activities without revolutionizing them. And finally, some activities will be fully disrupted.
The most promising applications in my opinion: wholesale electricity market management, intelligent production assets, peer-to-peer (P2P) trading (electricity, electric vehicle charging, leases, etc.)”
4. Amanda Hagen, Head of Marketing of FutureFuel Technology
“The uptake of blockchain technology has already started to encourage the use of more renewable energy than ever before. As this continues, we envision blockchain playing an increasingly important part in the energy industry.”
5. Vincent Manier, CFO of ENGIE Insight
“Even if a lot of use cases are related to transactive energy and peer-to-peer trading, I am particularly excited at carbon reporting applications. Once we solidify an open, decentralized carbon reporting infrastructure built around blockchain technology, companies can trade carbon assets in the market.
Blockchain will not only enhance carbon reporting by standardizing and recording all relevant emissions data, but it will also ensure all value-based transactions are valid and settled automatically.”
6. Dr. Michael Yuan, Co-founder and Chief Scientist of The CyberMiles Foundation
“Plasma, which is aiming to provide a framework to verify arbitrary computing workload [is the future]. This is much harder to achieve with efficiency, but could be much more useful. It also further allows smart contracts on the main blockchain to spin off child blockchains, known as side chains. The side chains can be nested, creating a hierarchy of side chains that represent microgrids at different levels.
The more we know about energy-related transactions, the more we can develop automated checks, and hence reduce the need for complex cryptoeconomic games. A win-win.
7. Le-el D. Sinai, Associate, Reed Smith
“When electronic trading and recording was introduced, many were skeptical as to whether the industry could thrive away from paper and the pits. Today, the complex power, gas, emissions, oil, metals and agricultural markets could not survive without the capability of the internet.
It will not be surprising if, much like electronic trading, blockchain’s application to this sector quickly turns to one of widespread acceptance and ultimately, dependence.”
8. Morten Lund, Partner and Chair of The Energy Storage Initiative, Stoel Rives LLP
“The future of energy undoubtedly includes blockchain technology as a catalyst to disruptive thought about how energy is distributed. As pilot programs validate various blockchain applications for widespread adoption, it is likely that blockchain will also drive a reconsideration of energy regulations at the state and federal level.”
9. Buck B. Endemann, Partner, K&L Gates
“Existing utilities and energy market participants will continue to partner with blockchain platforms and consortiums to develop structural, back-room use cases for blockchain and will bring them to scale.
As regulatory regimes evolve to accommodate an increasingly distributed and bi-directional energy grid, blockchain may play a role in ensuring the integrity and security of these distributed networks.”
10. Peter Bronski, Director of Marketing and Communications of The Energy Web Foundation
“We're very optimistic about blockchain's future in the energy industry. So many use cases are ripe for a blockchain-based solution, from the issuance and ownership tracking of renewable energy certificates to a seamless experience with electric vehicle charging.
Moreover, the global energy sector is amidst a massive transition defined by decarbonization (the rapid growth of renewable energy), digitization (the electricity grid remains a largely analog technology, but one that is shifting fast to digital), and decentralization (customers are adopting millions — and eventually, billions — of distributed energy resources such as rooftop solar, battery energy storage, smart thermostats, and electric vehicles).”
11. Assaf Ben-Or, CEO and Founder of Greeneum
“Energy production, distribution and management is moving from central and regional systems to local, next to the consumption endpoints. Therefore the future of blockchain technology in energy relies on providing solutions to establish, manage, and monetize local microgrids.
The high energy costs of proof-of-work blockchain protocols will be left behind for new, more efficient, and scalable methods that have already been tested or developed, at least as proof of concepts. These include as delegated proof of stake (DPOST), proof-of-authority (POA), proof-of-energy-transaction (PET), and more.
Large and medium utilities will use the technology to provide services for industry clients, while private users and prosumers will be able to sell or purchase their energy based on their preferences and market conditions.”
12. Josef Kulovany, CEO and Founder of WECHARG
“Since time immemorial, money has attempted to emulate the value of energy. The future of blockchain in energy is an opportunity for renewable energy to finally grab market share from the $65 trillion energy sector.
An autonomous, decentralized energy marketplace permits energy and money to work as one in the same. Now anyone and everyone can commoditize energy that is backed by the naturally occurring demand of a distributed energy marketplace.
In the future of blockchain meets energy, energy and money are one. In the future of blockchain in energy, energy is money.”