The future of energy blockchain: more business models are entering the process of materialization

GTM Research recently published "The Development of Blockchain in the Energy Sector in 2018". The report analyzes the current development of blockchain in the energy sector worldwide and makes four predictions for the development of this field in the coming year.

Energy infrastructure investments using blockchain will grow

More and more companies have succeeded in blockchain energy pilot projects. It is expected that investment in blockchain energy facilities through traditional venture capital will accelerate. Energy facilities based on blockchain technology are a very important indicator in this field and play a supervisory role in the development of this field.

Tepco, German energy giant Innogy and Centrica, the UK’s largest gas supplier, have invested directly in five startups.

They and other utility companies have also invested in a number of consortium-based blockchain groups, including the Energy Web Foundation, which attracted attention last year for raising $17 million.

Wholesale energy trading will strive to achieve commercial deployment

Peer-to-peer energy trading is the focus of most pilot projects, accounting for 59% of planned and completed projects. This type of project is not the most commercially feasible. The pilot projects previously carried out by two European companies in cooperation with dozens of industry partners have achieved great success. BTL, the leader of one of the pilot projects, announced in January this year that it would establish a business trading platform OneOffice and operate it using blockchain technology. Ponton, the leader of another pilot project, said it would fully deploy its wholesale trading platform in 2018. Other startups are also working hard to capture this field, especially as the business model is initially formed and more and more companies will flock in. LO3 is testing a new method and is preparing to put it on the wholesale energy trading market. It is working with Germany's Epex Spot to enable consumers to establish direct connections with wholesale markets and realize decentralized energy exchanges.

Electric vehicle charging and renewable energy credit (REC) trading are expected to be the first profitable use cases of blockchain in the energy sector. In the case of electric vehicle charging, there is limited charging infrastructure and no unified standards for billing, scheduling, and payment software, which creates less resistance to new concepts and technologies. For RECs, blockchain can replace traditional platforms and reduce the possibility of double counting. Developers can design these REC trading platforms to comply with existing regulations.

The current technology development stage is still in the early stages, and the maturity of blockchain technology is relatively poor. Whether it is Ethereum, which is hailed as the second-generation blockchain technology that surpasses Bitcoin, or Hyperledger, an enterprise-level blockchain platform that is highly anticipated by a large number of large companies, they are currently in the early stages of development. However, we can still see that blockchain technology is gradually taking root, and its current rapid development is profoundly changing the energy industry.

my country's energy blockchain has unlimited blue ocean potential

Compared with the active blockchain energy investment and application in foreign countries, my country's energy blockchain field is still basically a blue ocean, but many explorers have begun to appear in this blue ocean in recent years.

"Energy Internet" is an important strategy for my country's energy development, and the application of blockchain in the energy field has gradually been put on the agenda. As early as 2016, "Basic Theory of Planning, Operation and Trading of Energy Internet" had been defined as a basic research topic under the "Smart Grid Basic Support Technology" project by relevant documents. The implementation period of this project is 5 years (2016-2020). The establishment of the first blockchain energy laboratory in 2016 and the launch of the energy blockchain main chain Demo marked the efforts made by Chinese explorers in this regard. Research related to energy blockchain has gradually followed up.

Last November, State Grid submitted a patent application titled "Method and Device for Power Trading Control Based on Blockchain" to the State Intellectual Property Office of China. In April 2018, the application was officially announced to the public. State-owned enterprise giants have made plans. The invention involves an energy Internet system, which aims to solve the problems of high operating costs, poor security and difficulty in ensuring user privacy in the centralized management scheme of the energy Internet.

In addition, this year, Sinochem Energy Technology Co., Ltd., a subsidiary of Sinochem Group, successfully used blockchain technology to complete a shipload of gasoline exports from Quanzhou, China to Singapore, and it is the world's first energy trade blockchain application project involving government departments.

At present, the implementation of energy Internet in China is not limited by backward technology. In fact, the information level and industrial technology strength of China's energy system are close to or even exceed those of some developed countries. With the reform of the power market and energy supply side as the background of the times, blockchain technology has the characteristics of decentralization, openness, transparency, security and reliability, which provides an important technical means to solve the transaction friction in the energy system, and will have a wide and far-reaching impact on many aspects of my country's energy field.