Blockchain application in the energy sector looks promising, and the potential impacts are profound.
The energy sector is a complex and highly regulated sector, and implementation of blockchain technology might be a Herculean task.
However, if that is achieved, blockchain technology can be used to create more efficient and sustainable energy systems.
Blockchain’s potential impact on energy systems includes, increased transparency in energy transactions through the use of automated blockchain systems such as smart contracts.
Improved management and efficiency of energy systems by using smart meters and energy storage tools.
Increased use of renewable energy by using decentralized energy systems to increase the amount of renewable energy production produced, as well as track the production and consumption of renewable energy.
Blockchain technology can also be used to create a more efficient and sustainable energy sector, it can do this through the application of various technologies. Below are some of the ways this can be done.
Use of Smart contracts for energy transactions
This means buying and selling of energy can be done through smart contracts, a blockchain technology that self-executes once its terms are met.
This will greatly increase transparency, efficiency and sustainability in the energy system.
Decentralized energy systems
The use of decentralized systems in the energy system will facilitate access to energy without the traditional intermediaries, this will also increase transparency, prompting more interest in the energy system.
Also, the overall use of energy production and consumption can be tracked efficiently.
Also read, Blockchain and Renewable Energy
Blockchain can be used to facilitate and track carbon offsetting projects, in that people who actively participate get carbon credits which can be traded eventually for energy.
This promotes sustainability as the projects help offset carbon emissions.
Supply chain management
The supply chain involves energy and energy-related goods and equipment. Blockchain can be used to track their movement, this ensures the process is transparent and efficient.
Grid management, integration and balancing
The use of blockchain for grid management, integration, and balancing will improve the overall efficiency of the energy system.
Grids can be broken down into microgrids in the blocks and monitored independently by small-scale energy systems.
Blockchain can also enable the effective integration of distributed energy resources, such as rooftop solar panels and electric vehicles, into the grid, allowing for more efficient use of these resources.
Promoting the use of Electrical Energy
Blockchain can be used to promote the use of electrical energy to reduce dependency on other forms of energy sources thereby improving sustainability. For example, blockchain can be used to manage electric vehicle charging and payments.
This is the tracking of energy-related assets to monitor their performance and maintenance, this ensures the system remains efficient and because maintenance is carried out when due, it improves sustainability as well.
Blockchain can be used to tokenize energy assets, such as solar\ panels or wind turbines, allowing them to be bought, sold or traded like other assets on a blockchain-based marketplace.
Energy storage management and smart metering
This is the use of blockchain to monitor and manage energy storage systems, such as batteries and pumped hydro, which ensures the efficient use of stored energy.
Energy efficiency tracking and verification
Blockchain can be used to track and verify energy efficiency improvements and energy savings, ensuring results are accurately reported, which can help to reduce energy consumption thereby promoting sustainability.
Don’t miss important articles during the week. Subscribe to blockbuild weekly digest for updates.