Blockchain: the future of the energy industry

3 min

The future of energy will be digital. Blockchain technology will create new people centric energy markets using software that enables customers to set their buy and sell rates for distributed energy online.

We hear a lot about blockchain in the media but what exactly is it? Essentially, blockchain is a form of distributed ledger (a database which is shared by consent and synchronises digital data across networks and countries) which transforms both currencies and commodities into a digital form. This allows one person to trade with another (or peer to peer trading) without relying on a middle-man entity such as a bank or power company to process the transaction for you.

Peer-to-peer (P2P) trading in the energy industry, enabling grid connected consumers to buy and sell electricity or solar energy without a retailer, is becoming more frequent in Australia. There are start-ups appearing across the country with the aim of disrupting the traditional retailer-customer relationship by introducing a decentralised energy model that gives consumers control.  

Distributed Ledger Technology (DLT) is expected to herald significant change not just for the energy industry but for financial services too. The world’s first industrial scale blockchain in financial services will go live here in Australia in 2020. The Australian Stock Exchange (ASX) announced earlier this year that DLT will be used to clear and settle the $2 trillion cash Australian equities market.

Another important development is the Energy Web Foundation (EWF) which is building an open-source, scalable blockchain platform specifically designed for the energy sector’s regulatory, operational, and market needs. The intent of EWF, through its Energy Web Platform, is to ‘develop a market standard that ensures interoperability, reduces costs and complexity, aligns currently dispersed blockchain initiatives, and facilitates technology deployment through easy-to-implement applications.’ 

AEMO is investing in and designing a POC (proof of concept) blockchain platform that can be used by current and new industry participants.  It has the potential to considerably reduce industry costs in several areas. 

The AEMO blockchain technology platform will strive to:

Set the new standards for energy block chain transactions
Lower barriers to entry for new market entrants and participants

Technological advances in the energy industry continue to proliferate by the day with DLT, smart homes and businesses, electric vehicles and batteries (and battery storage), AI and machine learning all radically altering the way we live, work and use/distribute energy. 

Keep up to date on the latest industry developments with Energy Live via our newsletter (enter your email address at the bottom of the homepage) and in our Innovation & Tech section for a closer look into our changing industry.

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