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How Blockchain Will Become the Driver of the Energy Sector
Energy is a modern day necessity — processing energy and transmitting it through cable lines to homes and industries causes’ carbon emission. However, blockchain could make energy consumption greener. Blockchain records the transaction and eliminates the middleman, reducing energy distribution cost and promoting reciprocal energy relationship as excess energy can be resold.
Blockchain can improve the interconnectivity of high-quality data between homes using smart devices to control energy usage. Optimizing public and residential places can help conserve energy in the grid and avoid financial setbacks. Blockchain technology allows communities to exchange power when needed and less reliance on non-renewable sources. Here is how blockchain can improve the energy industry:
Digitization of the grid is a practical solution because renewable energy’s market share is increasing and it is pushing the energy sector towards decentralization. This challenges the network in effectively managing multi-party information and multidirectional energy flow while avoiding overload and outages. Blockchain can minimize fluctuations by producing and recording generation forecasts for different power producers and sharing within the grid. Data from virtual power plants (VPPs) may be included in the shared data because the power generation from decentralized energy sources is pooled together as one in VPPs.
Efficiency across the Network
Blockchain can efficiently integrate grid data on the cloud for collection, storage, and examination. Transparency increases when information from different parts of the platform is shared with different people. Emission records could be digitized, stored, and validated on the blockchain. Renewable energy certificates are easily tracked with blockchain. This eliminates the need for paper documentation and increases productivity. Moreover, two related sets of data will never be separately reconciled because it would be listed and peer reviewed on the ledger.
Connecting Consumers and Service Providers
The energy sector is going through significant changes and blockchain will become an essential tool. An initial coin offering (ICO) is where investors can buy tokens, and blockchain can help in maintaining transparency through a digital ledger to the public. Individual investors can track the number of watts that each digital token they purchase represents and tariff they receive from those watts.
Blockchain can improve transparency, energy trading, and power agreements: support new independent energy trading platform, and assist data exchanges. However, the biggest driver of opportunity will be regulation and standardization of processes and data formats across the sector. The mass adoption of blockchain depends on business leaders, as well as the development of the technology.