This report by the European School of Management and Technology (ESMT Berlin) shares the results of a survey of German energy executives and the Deutsche Energie-Agentur GmbH (dena) – the German Energy Agency - to gather opinions, current and planned actions, and visions of the future role of blockchain applications in the energy sector.
Blockchain is a decentralised internet protocol that enables transactions between peers without an intermediate institution such as a bank. Cryptocurrencies like Bitcoin operate using blockchain, but its applications can be also non-monetary, for example, smart contracts that are automatically executed once specific conditions are fulfilled.
Blockchains operate as distributed databases that contain a continuously growing list of data records: the so-called blocks. These blocks are time-stamped, shared, unalterable, and connected to preceding blocks; they contain data and programs, batches of individual transactions, and executables. Transactions are verified by computers run by the network’s users in short intervals: the so-called nodes.
So what are the benefits?
Security: Blocks are distributed, public, and encrypted so if a hacker wanted to modify a contract, the whole blockchain would have to be reconfigured at every node – a computationally and organisationally difficult task.
Process optimisation: Around half the opportunities identified for using Blockchain through the survey relate to billing, sales and marketing, automation, metering and data transfer, mobility, communication, and grid management.
Platforms and markets: The other half relate to peer-to-peer trade, public trading platforms (such as balancing markets, capacity markets, and intraday trading), private platforms (such as demand-side management, the coordination of the existing power plant portfolio, industrial energy supply, and virtual power plants) and decentralised generation (such as decentralised energy management, neighbourhood solutions and renewable installations).