Blockchain Offers Innovative Solutions for Disruptive Energy Consumption

Blockchain Offers Innovative Solutions for Disruptive Energy Consumption

Blockchain has attracted the attention of the power industry with its potential to unleash an energy revolution in which both utilities and consumers will produce and sell electricity. The smart home appliances connected to an energy trading platform might endlessly explore for the top offer and mechanically alternate to a brand new energy supplier through a smart contract. This expertise can permit the shoppers to move from their home or workplace on to energy sellers.


Blockchain might provide a reliable, low-cost way for financial or operational transactions to be recorded and validated across a distributed network with no central point of authority. Similarly, the “prosumers” can sell their surplus energy to other customers in the network directly through contracts established and validated through Blockchain.


Blockchain is a foundational technology that can be used to create new business models and underpin business, economic and social infrastructure. While many Blockchain use cases have been proposed for the energy consumption industry, the one gaining the most traction at present is peer-to-peer (P2P) power trading, where owners of small-scale generation will sell excess generation straight to other consumers. Today, centralized management of distributed energy resources (DER) restricts to whom and once DER owners will sell their energy consumption back to the grid.

A Blockchain-enabled P2P model allows much greater flexibility and could be a powerful enabler for a customer-centric transactive energy consumption regime. To support the development of Blockchain-based solutions for the energy sector, a lot of organizations are setting-up Blockchain Labs with the aim of accelerating new Blockchain applications such as distributed ledger solutions and its use-cases. If the new applications are successful for mass adoption, it would have profound impacts on the business models of the entire energy sector value chain.

Peer-to-Peer Power Trade

With the potential for a decentralized model based on blockchain to reduce transaction costs, smaller electricity producers could sell excess renewable energy to other network participants, thus, in theory, bringing down prices through increasing the competition and grid efficiency. Trusted third parties, such as retailers, may play a much smaller role in a distributed P2P model and smart contracts will automate processes that previously required manual work and multiple parties. With smart contracts, trades can be made automatically using price signals and real-time renewable energy production data throughout the network.

Grid Management and System Operation

Blockchain technology allows electricity networks to be more easily controlled, as smart contracts would signal to the system when to initiate specific transactions. This would be based on predefined rules created by the platform, designed to ensure that all power and storage flows are controlled automatically to balance supply and demand.
For example, whenever more variable renewable energy is generated than needed, smart contracts could be used to ensure that excess electricity is diverted into storage automatically. Conversely, the electricity held in storage could be deployed for use whenever the generated power output is insufficient. In this way, blockchain technology could directly control network flows and flexibility options, avoiding curtailment of solar and wind energy.

Blockchain systems are fully decentralized, with all transactions being arranged, executed and performed on a peer-to-peer basis. This is what makes blockchain technology potentially disruptive.
The possible energy use cases of blockchain technology show a lot of promise. In addition to reducing transaction costs across the system, increasing the efficiency of processes and thus delivering cost benefits for customers, the technology can enable direct interactions between all parties involved. This ensures that the existing generation’s capacity is utilized optimally, whilst energy is made available at the best price.