Can Blockchain Give The Much Required Boost to Energy Industry

The hype surrounding the "blockchain" has decreased somewhat in recent months, but the applications are maturing. The energy industry is increasingly concerned with the topic. Many energy providers agree that blockchain technology can have a significant impact on the energy industry in the coming years.

But what is the current status of the discussion about blockchain, and what are the possibilities and perspectives that blockchain approaches offer? The number of specific blockchain projects - especially in the peer-to-peer area - is also increasing.

Blockchain technologies can become the dominant design in, for example, public charging and billing transactions electric vehicles. The cost reduction potential of blockchain applications for the energy transition is nevertheless "limited". In particular, in markets where digital solutions have already proven themselves, the technology meets secure competitive products and services.

Blockchain can be particularly useful if it complements existing protocols for digital information exchange. For the core technology to develop further and its use in the energy industry to be expanded, politics and business have to pay more attention to the topic.

It is far too early to speak of a triumphal march, blockchain still has to deliver on its value proposition.

That is also the assessment of many managers in the energy industry. It will take at least two years before the blockchain is sufficiently mature in the energy industry. 

The blockchain initiative Energy (BCI-E) in the EDNA Federal Association for Energy Market & Communication does not speak of a triumphal march either. But: The blockchain has arrived in the form of pilot projects as technology in the energy market. The vast majority of the 35 projects in the energy sector identified in a study deal with the topics of "generation and sales." At the end of 2019, the BCI-E opened up to other digitalization technologies as "BCI-E +." "The trigger for this repositioning was the realization that blockchain is a perfect solution in certain processes, but not in others or only in combination with other technologies," it said.

The blockchain technology could be interesting for system operators, if their EEG promotion expires in the coming years. Many companies use blockchain model allowing wind millers and solar power operators to market their systems directly to end customers and thus generate cost-covering revenues. That enables regional direct marketing of electricity from specific plants. Other players also rely on local electricity models based on blockchain.

Such regional electricity model can become exciting fields of application for the blockchain in the post-EEG period. The Research Center for Energy Economics (FE) also draws attention to this. "The blockchain technology and the use cases around the labeling of energy quantities and the P2P trade represent a possible marketing option for new and post-EEG plants and can improve the profitability of these plants in the long term, thereby giving a major boost to the rising number of energy industry solutions.