Blockchain and the Energy Sector
In this article, we take a look at some examples of the potential use of blockchain technologies in the energy sector.
Cet article est également disponible en français.
Take the examples of Deliveroo, Uber Eats and Frichti: what we believed was a good experience five years ago – to have a warm margherita delivered to our door in 45 minutes – is today viewed as a little disappointing. Through simplifying the ordering process, providing a wider menu, and having exceptional customer follow-up, these services have completed the satisfaction circle to such an extent that our overall expectation has permanently risen to a higher level.
Companies like these impose new standards of experience that create great satisfaction because their focus is squarely on customer needs. By studying and analyzing these standards, we can learn to optimize customer satisfaction and apply the principles to our own activities.
However, these projects can be complex because, often, the entire service paradigm needs to be redesigned. Satisfaction is resolutely business-critical because it helps to strengthen the brand image and assists in the acquisition of new customers and the retention of existing ones. Customer experience and satisfaction measurement should be a champion of corporate culture and no longer limited to a simple KPI.
Cryptocurrency mining is a well-known use case: the crypto-currency security mechanism ‘Proof of Labor’ requires a large amount of electrical energy, so as to ensure that the cost of an attack on the network is greater than the potential gain of the network. In order to have enough computing power allocated to securing the network, the ‘miners’ are rewarded by the cryptocurrency network. Many companies were created around this activity which became known as ‘cryptocurrency mining’. Now, in order to reduce energy costs, a number of these companies are favouring renewable energies, capitalising on surplus energy produced in renewable power plants to obtain lower rates.
This can be taken into account in ROI calculations for renewable power plant projects: instead of losing energy produced but not used, it can be used to mine cryptocurrencies and therefore make it a more profitable investment. The market is real for the energy sector, and has been developing over several years.
One challenge of energy consumption is determining and monitoring the source of electricity that is being consumed. In the context of green contracts, for example, this can be problematic: how is it possible to guarantee to the consumer that the energy she consumes comes directly from renewable sources? Two companies, Engie and Ledger are working together on a device that guarantees the source of green energy that is produced by storing it on a blockchain which makes it possible to provide transparency to users.
These traceability capabilities can also be useful for local loops – peer-to-peer power generation networks – allowing users to exchange energy with each other. In addition, they can simplify exchanges between different operators, for example, in the case of sales of resources between countries.
It is already possible to industrialize these projects on a certain scale as shown by the collaborative work of Engie and Ledger, and the need is real for consumers. In addition, the prospects related to traceability are numerous, so this is a topic of particular interest today.
Combined with the Internet of Things (IoT), Blockchain technologies can help set up an intelligent monitoring system, which will reduce intervention time during a failure or even anticipate them. IoT accurately measures the data specific to each device, and Blockchain technologies, through their peer-to-peer protocol, can guarantee the integrity of the transmitted data. Imagine, for example, a hacker connection on a power line with a monitoring system consisting of only one IoT box: if the hacker knows about the case, he will be able to bypass it, or send false information. If we integrate this single box with others so that all the boxes of the network validate the integrity of the data – the same validation model that the Bitcoin nodes validate the blocks built by the minors – the boxes of the other equipment will then be able to reassemble the information that the equipment sends. Erroneous information will be quickly detected.
The scalability problems inherent in Blockchain technologies still make the implementation of this type of system complex, but solutions are beginning to emerge. Projects such as IOTA seek to address issues specific to interactions between Blockchain and IoT.
These are just a few cases of Blockchain technologies being used in the energy sector, there will be many more that are yet to be identified. If you would like to find out more, do not hesitate to contact us.
Want to know more about Blockchain and Energy Sector?Contact us