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Blockchain Technology

7.2.1  Energy Trading on a P2P Basis

A recent paper by the German Energy Agency (DENA) reveals that the executives of

the German energy sector opine that blockchain technology’s blueprint holds prom­

ise for creating an effective, accessible and – crucially – sustainable infrastructure

of power generation and distribution (Mika & Goudz, 2020). The bulk of industry

practitioners also believe that eventual expansion of this sector is highly likely – as

per the latest DENA survey (Burger et al., 2016). The existing views of market lead­

ers today may be heavily influenced by internet buzz and new prospects around the

consultancy sector. Due to the still embryonic nature of this technology’s prospects,

there are no adverse precedents of blockchain technology creating accidents or mak­

ing unsavoury headlines to dissuade analysts’ attitude toward a technological transi­

tion to a more sustainable energy infrastructure.

It appears that the uncertainty surrounding the way blockchain technology will

eventually transform the industry is not large enough to discourage quick adoption.

Indeed, several consortiums have already been formed to bring together multiple

industries to further this technology’s reach and accelerate its adoption. The Energy

Web Foundation is expected to partner with players of the blockchain working groups

in the energy sector around the world to create a flexible, open-source platform tar­

geted directly toward the energy industry demands and design it to be energy efficient

(Burger et al., 2016). Singularity (a well-known start-up in the energy industry) is in

collaboration with the Rocky Mountain Institute (an American energy company) to

create a partnership for the energy industry with the vision of making blockchain

more productive to encourage more efficient operations in the energy sector (Bürer

et al., 2019). The new partnership seeks to pursue R&D in blockchain and energy

to help utilities or investors, technology creators, consumers and green energy firms

realize how current market structures may be assisted, undermined or transformed.

Bloomberg New Energy Finance (BNEF) has published one case of a company

using blockchain solutions to attract new consumers (McCrone et al., 2019). BNEF

considered that Tokyo Electric Power Co. would like to regain customers’ trust and

confidence by restoring a transparent information structure in the domestic market

(McCrone et al., 2019). Japan's largest power provider has developed a company

called Trende, which attempted to enter solar energy production and enable P2P

power purchases of solar technologies via blockchain (Martin, 2018).

Smaller companies, start-ups and pioneering firms are aggressively experiment­

ing with P2P trading. This extends to both utility services and energy-based frame­

works. Such trading through blockchain can bring possible technological changes.

These changes can eventually generate more profit for some customers (Martin,

2018). Consequently, blockchain may shape the prospective future of P2P power

trading, since the energy start-ups are looking forward to offering competitive deals

through innovative technologies. Nevertheless, it is yet to be understood how such

peer-to-peer transactions can be coordinated on a scalable level; therefore, maintain­

ing improvements in the infrastructure that facilitates such power trading is quintes­

sential. Several countries are already experimenting with P2P on a limited scale,

adopting a pilot approach.