There are few things for which consumers have no alternative: There is competition from discounters even for mobile phone contracts, countless insurance providers to choose from, and nearly every product can be acquired from any number of dealers through all kinds of channels. Only with electricity are things more complicated. There may be many providers in the market, but it continues to be delivered as always through local suppliers. Private owners of rooftop solar power systems or companies that want to sell off excess energy can feed power back into the grid – but they cannot connect directly with a buyer. Until now.
With blockchain technology, the need for settlement pathways to pass through the power companies could become obsolete. This technology relies on the wisdom of the crowd: No longer does one supplier mediate supply and demand, verify data and ensure the exchange of goods for money, but rather all participants in the system do so equally. With blockchains, an infinitely long file (chain) stores all the information on all the computers that are connected in the blockchain. When new data is added (a block), it is stored simultaneously on all computers.
Decentralized is more secure
This makes decentralized systems more secure from attacks and outside manipulations, because instead of a single central server supplying information, the blocks in the entire chain verify a transaction. This means no middleman is needed, no clearing house – and no one who earns fees for the transaction.
Using a blockchain, in theory any power producer can take care of their own sales: locally, directly to their neighbor, or at a higher level, completely regulated by supply and demand. PwC consulting, in a study of the technology, sees numerous application possibilities in the energy sector: Reading, calculating or documenting via a single provider would become superfluous with blockchain technology. Locally managed transaction and energy supply systems could be imagined, as well as documentation of system conditions, for example of smart meters or photovoltaic installations. With decentralized storage of transaction data protected from manipulation, certificates of authenticity for renewable energy or CO2 certificates are also an option.
Consumers take sales into their own hands
The model is already a reality in New York. Since April ten neighbors have been supplying one another with solar power from their rooftops. And some initial successful projects are also rolling out in Berlin. Consumers could purchase their electricity however they choose with this technology. Eco solar power from your neighbor in the morning, hydropower from the local energy supplier at mid-day, and regional wind energy at night. This could even be automated using an app: "It registers how much energy I can draw from solar and other generation systems or batteries near me. And my utility sells me the rest," explains Tobias Federico , CEO of consultancy Energy Brainpool.
But complete anarchy on the energy market is unlikely in the foreseeable future. A number of regulatory issues remain, according to PwC. For example, it is not yet clear who in a blockchain transaction grid operates the measurement points, who receives accreditation as an energy supplier and who is authorized as an accounting grid manager. Another key question is who is responsible for secure supply and data protection in such a system.
No more inconvenient contracts
But for a small portion of energy supply, blockchain technology is a very relevant solution. For drivers who charge their electric cars at charging stations without service staff, blockchain technology offers a simple and secure solution for settling their bills . Using automated "smart contracts," the blockchain can manage communication between the car and the charging station individually for each transaction. This eliminates the inconvenience of needing a contract with a local power supplier. With blockchain technology, the contract details are automatically registered in the background at every charging session, making it possible to charge spontaneously anywhere. Which should give a significant boost to eMobility.
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