The energy sector evolves towards decentralization. Each time the energy we consume is generated in a greater number of places. The generation centers are getting smaller, largely due to the arrival of renewable technologies . In addition, the number of electric distributors is increasing. And, nevertheless, they are still systems controlled and regulated by a central authority.
It could be said that society in general tends to more decentralized models , where the singularity of each individual grows in importance. The great development in recent years of digital technologies and telecommunications drives this change. They are also essential in the development of the collaborative economy. Thus, online platforms arise that put individuals in contact so that they can exchange among themselves, without having to intervene a third party that controls or authorizes the exchange. We speak, for example, of platforms for buying and selling used objects, or renting space in vehicles to travel, etc.
In the world of energy this change is still to come. We have already assimilated all that it is possible to install small units of power generation in buildings or private houses (photovoltaic, cogeneration or others), and that therefore will arise producers-consumers (“prosumers”). But the piece that allows transactions between individuals in a comfortable, secure and agile way is missing. Blockchain could be an important part of that piece.
The change in the energy sector towards a more decentralized model should think of individuals (with digital identity), instead of thinking about places. In other words, electricity purchase contracts are currently referred to a physical place (a CUPS with its accountant), and not to a person. The new model could associate an individual with specific consumptions in specific places and times, and charge him for such consumption, without prejudice to the time or place of consumption. Thus, a person could consume energy for their electric vehicle or for their phone at a friend’s house or in a shopping center, and those consumptions would be regulated according to a specific contract. In addition, the registration of such consumption and billing could be done automatically. All these operations could be based on blockchain technology .
How key is the blockchain for the energy sector?
To answer this question we should start from the basis that the important thing is to get a system that offers certain functionalities, regardless of the technology used.
A decentralized energy system requires intelligence because it is essential to know how much, when, where and by whom it is generated or consumed. Therefore, it is essential that all energy meters are digital (“smart”) and that they also have the ability to send data. That is, they must be able to be read remotely. Thus, all domestic meters in Spain will be digital in 2019, and may send data through the electric line (PLC), but not all commercial or industrial meters (type 4 or type 3) have the ability to read by law, but each consumer is free to enable such capacity or not. But if we assume that all the counters will be able to send data (be connected to the internet), then we have the base to build a decentralized energy system.
Blockchain allows you to build a decentralized transaction logging system that is very secure and very agile, but it is not the only option. That is, to evolve to a decentralized energy model, it is not essential to use blockchain. Currently, decentralized systems for the registration and storage of transaction data are sufficiently secure, agile and economical, apart from blockchain technology. In fact, the majority opinion is that blockchain is currently less efficient than conventional data logging technologies, because blockchain requires investment in hardware and because it consumes an impressive amount of energy.
In any case, given that blockchain is a very new technology, its pace of evolution and that of adjacent applications and processes are very high. There are many expectations placed on the potential that it has, but it has to be concretized in successful experiences on a large scale and that are replicable and sustainable.
Nor should we overlook that blockchain enjoys great popularity as the basis of cryptocurrencies, which currently live a boom moment. And is that blockchain is a very appropriate technology to build a currency, because its strong point is the security of data and records. However, while this feature is positive for an energy transaction recording system, it is not as essential as for the system that supports a currency.
In the next few years we will see many initiatives that will use blockchain in the energy sector, but it will have to bring enough important advantages to become the technology on which the new energy model is built .