On The Potential of Blockchain in the Energy Sector

Blockchain in Energy Sector
By Chethak

Today, one central authority distributes electricity to a vast geographical region’s offices, households, hospitals, factories and so on. But there is a serious drawback to this model—distributing energy promptly, continuously and without fail to millions of consumers from one central point is a cumbersome task. This is the reason behind frequent power outages, high costs or taxes, unused surpluses and so many other inefficiencies in the cities.


In the first quarter of 2018, blockchain projects raised more than 100 million USD for the energy and utilities sector. The peculiar characteristics of this technology especially its distributed nature and immutability can unlock and monetize value in the energy sector. And this can slowly but steadily influence the way environmental, economic and industrial systems function—all towards a vision of sustainability.

In Realizing a De-Centralized Energy Distribution Model

Blockchain can facilitate a transition from today’s inflexible centralized energy model towards a far more efficient de-centralized model.

Entrepreneurs can deliver novel, valuable solutions that can recognize shortcomings in diverse categories of vital energy-related data. Systems that can tabulate critical information such as energy provided to each consumer, details of damaged, cut or faulty wires and so on, will create transparency for every stakeholder, energy provider and consumer involved. Within such a framework, limitations present or that may possibly arise, the underlying challenge and the solution can be understood in a near-perfect way.

In Incentivizing Growth for the Energy Sector

Blockchain’s unique design can be harnessed to incentivize and promote growth for the energy sector. Through a simple peer-to-peer marketplace dedicated for energy resources, for instance, blockchain can realize newer ways to democratize access to energy, to make revenue and to raise funds as well.

There are already some blockchain startups that are immersing themselves into the renewable energy market. ‘TransActive Grid’ and ‘Suncontract’ are examples of blockchain startups that are actively helping users buy or sell renewable energy resources, in a secure, instantaneous and hassle-free way. 

In Inspiring Circular Economies

Blockchain has the potential to fundamentally change how we conceptualize energy as a commodity. Therefore, there is a potential opportunity for individuals, organizations and governments to pursue, to solidify and finally, to unlock financial value from solving redundancies, shortcomings or flaws in ongoing energy (management or distribution) models. 

In Incentivizing and Realizing Sustainability

A recent survey conducted by Nielson, a globally trusted data analytics company, reports that 66 % of global respondents are willing to pay more for products or companies that adhere to sustainability factors. Thus, blockchain being an electronic ledger that creates a cryptographically secure and immutable record of valuable transactions, the technology can be harnessed to efficiently and effectively map a business’s journey towards sustainability.

As a reliable means to track and to realize sustainability standards, the technology can help companies test and improve its core business and also help consumers or investors to take well-informed decisions. Subsequently, certain key performance indicators such as accountability, adherence to environment-friendly guidelines or compliance and sales, will grow.

Final Words

Today, there are already dozens of use cases of blockchain for the good of the environment. Outside of the energy sector as well, blockchain technology presents limitless opportunities for socially and environmentally oriented entrepreneurs. If such an entrepreneur wants to identify, to conceptualize and to realize an opportunity not only for prosperity but to help the environment, blockchain can be an indispensible component.