A Blockchain Could Upgrade The Utility Sector!

Blockchain can allow new methods to manage how energy is distributed, accounted for and safeguarded in the utility sector.

FREMONT, CA: Blockchain technology is developing as a key strategy and core area for industry modernization within the energy sector. Blockchain gives a platform for managing and transacting high-standard data using distributed ledger technology (DLT). Still, unlike other DLTs, blockchain is untrustworthy, requiring no intermediaries and thus providing the potential to catalyze existing business processes and reduce the overhead costs and complexity level embedded in the current energy ecosystem.

Using blockchain technology to optimize existing energy sector practices through asset traceability applications and other technology upgrades in the background are obvious choices for the energy sector. It's not surprising that such applications will soon appear on the horizon. The open issue about blockchain is, can it revolutionize the intake and receipt of electricity by residential consumers?

Blockchain can allow new methods to manage how energy is distributed, accounted for and safeguarded in the utility sector. For example, microgrids could turn more resilient with direct peer-to-peer (P2P) interaction between assets or participants. P2P enables smart electronic devices to share information without a focused system effectively.

Global utilities are testing blockchain's potential to produce new business models according to microtransactions promoted by the ability of blockchain to build trust between unfamiliar peers. These disintermediated transactions create possibilities to accelerate economic growth by slipping over the necessity of establishing large-scale centralized facilities to track asset-connected events or commodity-related transactions and process payments.

For a digital business, one likely industry vision is for utilities to be an energy sharing economy platform provider. The provider can utilize a permitted ledger-based blockchain in this focused model platform to track micro-energy transactions and orchestrate financial settlements.

Even if the acceptance of blockchain is in the initial stages, there is still strong evidence that this technology will gradually be used in various ways. Blockchain will obtain significant traction in the utility sector with its promise to transform transaction flows and new ways to manage and operate distributed assets and operations. Rather than looking at how blockchain can make incremental change possible, utilities should discuss how blockchain can contribute to the production of utility business ecosystems by investigating the distributed ledger's role in creating a trusted business environment.