How does Blockchain Benefit the Energy Industry?

blockchain

Blockchain to energy revolution? Blockchain technology can potentially transform the whole energy industry. Blockchains are an emerging technology also known as “Distributed Ledgers”, now have drawn significant interests from the energy suppliers, financial institutions, technology developers, and even national governments.  

You can learn more about the blockchain technology here from a previous article

For many years, innovations like an electric vehicle, smart metering, and rooftop solar have been catalyzing the energy sector. Now, the Ethereum blockchain enterprise rises as the emerging technology through the smart contracts and increments the growth of the energy industry.

blockchain

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If this enterprise Ethereum solution is implemented properly, then even the traditional energy sources like oil and gas could also generate benefits out of it. Especially the large-scale gas and oil conglomerates could use its ability to lower costs and reduce harmful impacts on environments.

Moreover, removing financial transactions and the intervention of any central authority will bring a unique decentralization and transparency that the sector has never witnessed before.

It can bring cost reduction, environmental sustainability, and transparency at the same time. In this article, we will know more about the impacts of blockchain in several areas of the energy industry.  

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To the Utility Providers

Being large and complex bodies, electric power providers generate required energy from solar panels, power plants, and other sources. They usually don’t compete within the same respect to financial institutions, rather more willing to share statistics and information that will give a great opportunity for the shared ledger of the blockchain. Moreover, this distributed ledger technology can develop a system of energy transaction which could be used to a whole lot of various sectors.

To Upstream Oil and Gas Sectors

Upstream indicates the extraction and resource exploration industry and some parts of it. The oil and gas segment upstream is influenced by four major stakeholders.

They are majors, oilfield services, national oil companies, and independents. The involvement of many stakeholders requires upstream and blockchain technology will ensure and optimize data coordination for multiple parties on a wide scale.

To Midstream Oil and Gas Sectors 

Energy industries involved with storing and transporting data after extraction are known as midstream sectors. It also includes the management of vast regulations and substantial transportation networks. This sector can extract potential benefits from infrastructure maintenance and disaster mitigation.

However, this asset intensity and complex regulations will require the companies to manage risk management and mitigation. Blockchain technologies will enable and excel asset tracking to the next level and also share information of multi-stakeholder. 

To Downstream Oil and Gas Sectors

Downstream companies usually sell products to the last level consumers like gas stations or refine sources into the final products including a dozen of different products.

These are directed to various customers and have particular environmental regulations which require different methods of transportation. Like upstream and midstream sectors, downstream sectors are also benefited from the wide-scale multi-product supply chain optimization of Blockchain.

These sectors can use the benefit of blockchain technology platforms to track and record the supplies and thus eradicate a huge amount of waste. 

To Wholesale Electricity Distribution

Companies associated with wholesale electricity distribution are now looking to implement Blockchain technologies and their main target is to connect the end-users with the grid. Combined with several devices, Blockchain will help consumers trade directly from the grid instead of the retailers. 

And supplementing retailers by this platform based on blockchain may significantly reduce the customer bills up to 40% or more. This results in a more stable energy market that is at the same time cost-effective and user-friendly. 

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Peer-to-peer Energy Trading 

One of the benefits of using digital ledger technology is to execute and record transactions by introducing a platform that will be reliable and efficient at the same time. Transactions will be recorded and settled almost instantly through blockchain technology without any intermediary help. This will also eliminate the requirement of reconciliation since everyone will use the same platform following one system. 

Conclusion

The bottom line is, blockchain can clearly benefit energy system proceedings, the market, and the consumers. By offering transparent, disintermediation, and tamper-proof transactions, it offers a grand solution for consumer empowerment and monetizes their assets. With the attributes it has, it will surely revolutionize the field of energy in the upcoming days for sure. 

READ ALSO: Electric Cars in Nigeria: a closer look at 2035

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About the Author

Md. Rafiul Islam Rafi
Md. Rafiul Islam Rafi is a seasoned writer and also an SEO expert, you can find him here writing passionately about energy and related technologies, contact us to hire him.

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