Guest Blog: Blockchain for the energy sector
08 Jun 2016
Blockchain, the computer code that underpins Bitcoin, has the potential to revolutionize business in the same way the internet did in the 1990s – and the energy sector is no exception, says Innovate UK’s Toby Proctor.
Blockchain, and the broader family of distributed ledger technologies, are consensus-driven, peer-to-peer transaction records that allow any parties to transact with each other but which no-one controls. Bitcoin was the first application built on distributed ledger, but with the advent of new technology platforms such as Ethereum, Eris or Hyperledger, much more complex transactions are becoming possible through smart contracts.
A number of different proofs of concept applying blockchain to energy challenges are springing up around the world, including in the UK. Transactive Grid is probably the most publicized of these – a joint project between an energy company and a blockchain developer to enable the micro energy generators on one side of the street to sell their generated energy to their neighbours directly. With just a handful of buildings generating electricity, this demonstrator is hardly going to change the world, but when you start to think of a future where all buildings are power stations as envisaged by SPECIFIC at Swansea University, the power of this technology to disrupt the existing energy supply chain becomes easier to grasp.
As well as developing applications for energy generation and distribution, other companies are looking to shake up the retail market directly – Innovate UK-backed firm, Electron Energy, are developing a new platform for energy metering and billing systems that will, in my view, open the way for exciting and innovative consumer energy services.
But don’t think this is all about startups – RWE recently presented their thoughts at the London Ethereum meetup that show how their research and development team are actively looking at the new opportunities that blockchain can bring to a multinational in the energy sector.
None of these developments are straightforward; as well as the technical challenges around building a new application with a new technology, there are commercial, legal and regulatory challenges to wrestle with in bringing some of these solutions to market. These are still early days for a new technology but the future looks to me very bright indeed.
Toby Proctor is Lead Technologist, Emerging and Enabling Technologies at Innovate UK. Innovate UK has several funding schemes relevant to the energy sector – please contact Toby on LinkedIn, or by email.