How Blockchain Will Change the Energy Market Forever

(ORDO NEWS) — The blockchain will not only allow many people to install solar panels on the roof (which will reduce electricity consumption and hurt the profits of its suppliers), it can also be used to trade electricity without the involvement of the supply company. Imagine that your neighbor sells you cheap solar energy directly, and you use it as you see fit.

Some energy companies are ready for this future and are trying to use blockchain to their advantage. The rest may soon begin to lose market share, yielding to local small-scale electricity suppliers, who will have a powerful tool for cheap and fast management of the entire process.

Jan Vrins, Head of Energy at Navigant Consulting, says:

“Blockchain is changing the entire infrastructure. If the utility companies do not understand this, they will be slowly fading away.”

Blockchain is expected to be the main topic of the Bloomberg New Energy Finance Summit to be held in New York this week. Hundreds of experts will gather there to discuss the future of energy. The BNEF estimates that more than $ 9 trillion will be spent on clean electricity generation by 2040. According to Vrins, blockchain will facilitate this investment. Here are some of the potential applications for the new technology and its impact on the energy market.

Power system management

This year Burlington, Vermont, may become the first city to use blockchain to manage generating capacity on the electricity grid. According to Killian Tobin, CEO of Omega Grid, the technology will drive supply and demand in real time.

The company develops blockchain solutions and helps Burlington with the implementation of the system. It will automatically recharge batteries in the presence of excess capacity and reduce consumption during peak loads (and high prices).

Projects like this can put process engineers out of work and reduce the need for equipment upgrades – the main source of income for electric companies. Tobin says:

“We’re starting with a small project and a few microgrids, but we want to extend the technology to the entire city grid.”

No more wires?

German company Tennet TSO is working with battery manufacturer Sonnen GmbH and IBM Corporation to create virtual electrical networks. They use blockchain to store surplus electricity from wind farms in thousands of home storage facilities scattered across the northern part of the country and transfer them to consumers in the south.

The project will eliminate the need for the construction of new power lines – one of the sources of income for supply companies.

Neighbor trade

Trading is the backbone of many blockchain pilot projects. Lawrence Orsini, CEO of LO3 Energy, is credited with the first peer-to-peer solar power deal done in 2016 on a microgrid in Brooklyn, New York.

A similar platform is planned to be deployed in Houston, where the group of companies will use its own resources to protect against fluctuations in electricity prices, instead of relying on the supply organization for this.

Blockchain is quite capable of helping energy companies. Tokyo Electric Power is looking to bring back customers that have dropped 15% since the government opened the industry to retailers. To do this, Japan’s largest electricity supplier created a division called Trende. Its goal will be to attract customers with packages that include solar panels and energy storage systems. In the future, it will be possible to sell surplus electricity to consumers through the blockchain.

Even Orsini admits that blockchain projects in the energy sector are still in their infancy and the end use of the technology may differ from early experiments. He says:

“This is not a revolution or the destruction of foundations. This is evolution.”

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