Energy and blockchain are two technologies converging.
Energy is moving toward a more decentralized system—distributed energy and distributed storage–putting pressure on grid managers who have to be sure the grid generates and uses the same amount of electricity at the same time.
Grid managers are concerned about the future of numerous energy generation and storage systems and the contribution and withdrawal from the grid. In Texas, the Electricity Reliability Council of Texas, or ERCOT, knows and is looking for a digital system to manage the large number of energy generation and storage systems that will hit the grid in the coming years.
Grid managers need digital systems to monitor and manage these systems on very short increments with response times as low as a half second.
Decentralization is a key aspect of distributed energy and blockchain technology. The two technologies are growing rapidly at the same time and exhibit similar key aspects.
For a decentralized energy network to survive, it requires cyber security. Blockchain is cryptographically secure.
Energy evolution requires the ability to track and react quickly to rapidly changing grid conditions as over time there will be thousands or more distributed solar generation sites and energy storage sites. To manage a grid under such rapid change over time and to manage all of those millions more transactions, blockchain provides the technology to tract and transact all of those with a distributed ledger and be more efficient than a centralized intermediary. Individual and aggregated groups or energy generation and storage can interact with each other to produce outcomes beneficial to each other and the users of the distribution system in a particular area.
The new disruptive electricity network is emerging at the same time as blockchain technology.
Emerging at the same time, distributed energy generation and storage and blockchain provide a mutualistic relationship—for the distributed energy resources to work with the grid and local distributed system, blockchain may be a key enabler of that energy network.
The convergence of these two technologies may create numerous lucrative opportunities for companies focused on solving these energy challenges and enable greater use of renewable energy.