How will Blockchain Benefit the Energy Industry?
Blockchain technology has the potential to transform the energy sector. The energy industry has been consistently catalyzed by innovations including rooftop solar, electric vehicles, and smart metering. Now, the Enterprise Ethereum blockchain presents itself as the next emerging technology to spur growth in the energy sector through its smart contracts and systems interoperability. Of the many use cases for blockchain, energy and sustainability are often less recognized. However, the World Economic Forum, Stanford Woods Institute for the Environment, and PwC released a joint report identifying more than 65 existing and emerging blockchain use-cases for the environment. These use cases include new business models for energy markets, real-time data management, and moving carbon credits or renewable energy certificates onto the blockchain.
Distributed ledger technology has the potential to improve efficiencies for utility providers by tracking the chain of custody for grid materials. Beyond provenance tracking, blockchain offers unique solutions for renewable energy distribution.
Legacy energy sectors, such as oil and gas also stand to benefit from the implementation of Enterprise Ethereum solutions. Complex systems with multiple actors have the opportunity to benefit from blockchain technology. For example, petroleum is one of the most traded commodities and requires a network of refiners, tankers, jobbers, governments, and regulatory bodies. The complex network of participants suffers from siloed infrastructures and numerous process inefficiencies. Large scale oil and gas conglomerates are seeking to invest in and implement blockchain technology because of its ability to lower costs and reduce harmful environmental impacts.
Oil and gas companies are particularly concerned about privacy and trade secrets. These private blockchain networks offer data permissioning and selective consortium access to pre-approved parties. Private and consortium blockchains provide an interim solution until public blockchains can implement the necessary privacy features businesses demand.
The main benefits of blockchain in the energy sector are:
- Reduced costs
- Environmental sustainability
- Increased transparency for stakeholders while not compromising privacy