Blockchain Comes to the Energy Industry
- Posted by Brian Fino
You might not recognize the word, but blockchain has the potential to turn the energy market upside down.
Blockchain is a distributed database that provides a public record of transactions. It is the technology behind BitCoin, the digital currency invented in 2008. In the last couple of years, the finance sector and other industries have begun to explore the benefits of blockchain and develop uses to capture its unique value.
The word “blockchain” refers to the technical description of how transactions are recorded and shared. But another way of describing it is to simply call it a “public ledger.”
Here’s how it might work for the energy industry.
We could create a public ledger to record the amounts of power a producer has agreed to provide to a utility. We could develop audit software to periodically review the ledger and ensure that producer made good on those deliveries.
We could also use the public ledger to record the amount of energy a consumer buys from an energy supplier, and what type of energy it was. And we could create billing systems that read the ledger and create invoices or monthly accounting reports.
A blockchain infrastructure would provide an open, transparent and timely way to record transactions in the energy business, from generation through consumption. This creates real efficiency and real opportunity.
Traditionally, the energy industry has been slow to adopt new technologies. But energy today is in the midst of a digital transformation and many companies are ready to leverage developments like blockchain.
If the energy sector is oriented around a distributed, open and transparent ledger, even a simple thing like a light bulb can participate in the market. Not to mention thousands of distributed energy producers.
Imagine that.Tell us what you think @finoconsulting or by email.