The market for blockchain-based platforms in the utilities industry has been analyzed by market research firm Navigant Research. Their new forecast is providing individuals with information on wholesale energy trading, EV charging and integration, and transactive energy platforms through 2026.
In 2016 and 2017, millions of dollars began to flow into energy-related blockchain projects, and the adoption of this technology only continues to grow. As more decentralized energy markets emerge, the opportunities for energy-specific blockchain applications have become an important target for the industry. Thus, according to Navigant, the total utility spending on blockchain platforms could reach $3.7 billion by 2026.
“The expectations for blockchain in the energy sector are sky-high, helped along by hundreds of millions of dollars in venture capital investments and initial coin offering (ICO) fundraising,” says Johnathon de Villier, Research Analyst with Navigant Research. “However, the technology is still immature and unproven, and utility spending will grow at a much more measured pace.”
Future blockchain development in the utility industry depends on external technological factors, including the penetration of smart meters and networked charging infrastructure for electric vehicles. According to the report, blockchain adoption will not be disruptive until Internet of Things devices and communications technologies are integrated into compatible blockchain networks.
Blockchains main applications are creating a distributed ledge to insure traceability and certification, asset transfers for peer-to-peer transactions with an intermediary, and smart contracts of autonomous programs executing pre-defined actions under immutable terms. Thus blockchain technology may answer the need of authentication of contracts and certificates addressed by the energy sector.
An example would be energy producers, suppliers, or distributors (electric, gas, fuel, water, etc.) are pushing energy efficiency. An amount of obligations could be defined in regulations over a specific time period. Each action indicating the amount of energy saved has to then be described and filled, and can then be controlled by the authorities. At the end of the specified period, producers can justify the accomplishments of their obligations, or pay penalties otherwise.
In the future registers could manage via blockchains, requiring little action from the authorities whilst being accessible to all players in the Energy sector, guaranteeing the uniqueness and the traceability of certificates and even managing the certifications’ trading. The benefit is for all players, since they would be able to concentrate on actions contributing to the energy sector.
Blockchain could also ease the billing process for utilities and reduce energy bills for consumers via smart energy. Smart meters associated with blockchain create an environment where transactions are open and secure.
A smart grid supported by blockchain would ensure an efficient local relationship between production and consumption of renewable energy. Participants could track heir usage and production while selling unused energy back to the utility. They would also have the ability to reduce their energy bills by making more informed purchasing decisions, avoiding consumption peaks. Smart meters and blockchain would ensure a simplified billing process for faster switching times as well.
To learn more, the Navigant report, Utility Blockchain Applications Market Overview, provides an overview of the developing market for blockchain-based platforms in the utilities industry. The study focuses on wholesale energy trading, certificates of origin, EV charging and integration, meter registration and switching, and transactive energy platforms. Global forecasts of utility spending, segmented by region and use case, extend through 2026. The report also describes the components of a blockchain architecture and explores the competitive landscape and key challenges that must be addressed before blockchain can be widely adopted in the energy sector.