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Blockchain in Energy: Overcoming Industry Challenges

The energy sector is on the brink of change. As it struggles to adapt to the increasing demand for renewables, blockchain in energy and utilities is enabling a more flexible approach to managing supply and demand — from peer-to-peer energy trading, to demand-based pricing.

Ensuring Regulatory Compliance With Blockchain Technology

Energy & utilities providers are required to provide vast amounts of data to regulators and government bodies to ensure compliance. But sourcing, analysing and delivering this data is incredibly resource intensive. With blockchain technology, the energy sector is benefiting from immutable data, increased traceability throughout the supply chain and the ability to seamlessly and securely share data with regulators (or other stakeholders). All of which are helping to ensure regulatory compliance and streamline the regulatory reporting process.

Improving Profitability With Blockchain

Blockchain technology in the energy sector is allowing energy & utilities providers to significantly reduce costs and improve profitability. Operational efficiencies through automatic execution of transactions and settlements, the elimination of intermediaries and the secure sharing of immutable data between stakeholders, are all delivering real cost savings for energy and utilities companies direct to their bottom line.

Blockchain Use Cases in Energy

The use cases for blockchain in energy are dynamic; from innovations in the way that energy is measured, to how it’s traded and consumed.

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Peer-to-Peer Energy Trading

One of the more transformative impacts that blockchain is having on the energy sector is the enablement of peer-to-peer energy markets. Blockchain-powered peer-to-peer energy markets are allowing consumers producing renewable energy (from solar panels or other sources) to sell energy directly to other participants in the network. Transactions are verified automatically on the blockchain without the need for central authorities or intermediaries.

Renewable Energy Certificates on the Blockchain

Blockchain technology is the perfect solution for providers looking to mitigate fraud in Renewable Energy Certificates (RECs). With an immutable digital ledger, REC transactions can be traced and validated instantly and automatically. Double selling of credits would be avoided as duplicate transactions would be flagged as invalid. Meanwhile, the transparent nature of blockchain technology means that providers can both trace and guarantee the origin of energy like never before — allowing them to prove that energy is both clean and sustainable.

Automatic Settlement of Trades

Blockchain technology in energy & utilities is allowing providers to automatically record and settle transactions without the need for intermediaries. Trade confirmations can even be done on a peer-to-peer basis. This means the elimination of intermediaries such as clearinghouses or brokers, a more streamlined and efficient process, and a reduction in costs associated with trade matching. Smart contracts on the blockchain can be utilised to automatically trigger transactions and settlements not just for financial trades, but physical trades too.

 

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