The number of energy related products is exponentially rising; vehicles, computers, air conditioners, servers and smartphones.
Challenges with the energy sector
- Geopolitical differences over carbon emission.
- Hazard in energy demand
- Aging workforce
- Business issues in energy supply
- Regulatory systems and infrastructure constraints.
Emerging issues in energy sector
Emerging issues in energy sector
Core blockchain capabilities
Promising energy sector applications
Falling technology costs;decentralization;changing US energy supply system;evolving and control capabilities
Decentralized systems can be self administered.architecture sets permissions,regulatory rules based system
Distributed energy resources
Vehicle electrification;falling battery costs;decentralization;decarbonization
Enables smart contracts for streamlining and automating contract terms for example deposits, payments,proof of performance. Removes need for trusted third parties;regulators and governments can observe record details
Electric vehicle deployment
Decentralization, digitization,changing US supply system, evolving carbon markets
Removes need for trusted third parties;regulators and governments can observe or record details; high process transparency and enforceability;opening access to emerging markets
Carbon tracking and registries
Global population growth;shifting global markets;decarbonisation;electrification
Supports digital payments;high process transparency and enforceability;opening access to emerging markets
Energy transactions for emerging markets
Decentralization, digitization, changing US supply system,emerging global natural gas markets
Business partners can access records;removes need for trusted third parties;regulators and governments can observe and record details
Issues are who will see the benefits, barriers to its use and logistical challenges to its deployment. Also, at the local level, blockchain offers a technology solution to improving situational awareness for distribution utilities, but this requires utility buy-in, without which blockchain-based chargers may not be completely valued.
Blockchain remains to be demonstrated robustly in most energy trading environments. The fully-burdened cost of a blockchain for managing a large-scale trading operation is unknown and it may be may be difficult for trading firms to scale up their blockchain-based operations until other active users across the system do the same.
It may be difficult for firms to justify the switch to blockchain as significant investments have been made in current platforms. Another major risk is the uncertainty around the successful adoption of blockchain across the market.
Challenges are that in some emerging markets it may be difficult to ensure active consumer participation at high levels, while another issue is that blockchain’s relatively new and untested nature may make its adoption too risky for existing regulatory structures to adapt.
In summary, the report comments that some of the energy applications of blockchain are expected to mature over the next few years, but others are long-term prospects that may be limited by existing policy, regulations, business models and systems engineering. Blockchain applications for energy offer the greatest breakthrough potential where there are rapid changes and emerging issues and there is alignment of energy sector trends with the core capabilities of blockchain