The utility industry is rapidly changing with emerging technologies. Digital disruption effects and presents opportunities and challenges for every sector. The highly regulated power industry needs to move away from traditional business models with sophisticated operational structures. According to GlobalData, the blockchain technology creates a paradigm shift in the industry towards a more decentralized and transactional environment. High operating costs, aging grids, safety, regulatory compliance, and personalized customer service are the key challenges electrical companies face today. Because of the potential of blockchain to address many of those problems, entrepreneurs are now interested in experimenting with the technology.
An analysis of the GlobalData Disruptor Tech Database reveals important use cases of blockchain in the field of power and selects start-ups and power companies that work on it. Decentralizing energy via blockchain led to trading platforms as LO3 Energy implemented by the Brooklyn microgrid where electricity can be bought or sold directly in the P2P network, thereby eliminating the need for intermediaries. By leveraging the potential of the blockchain, P2P energy networks can create a decentralized marketplace for electric vehicle drivers and station owners to reward each other. German startup Motionwerk is launching its Share&Charge energy sharing project P2P based in the blockchain, enabling users to share money with their own private power charging stations. Other starters include Drift, Electron, FlexiDaO, Grid+, and Riddle&Code as a blockchain driver for disruptions in the electric power.
While blockchain technology has begun to shrink in its current power industry phase, proof-of-concept projects and large-scale production deployments continue to dominate it. Centralization and highly regulated electrical power utilities are similar to banks, and thus, it is essential to create the perfect setup for implementing transformative technology such as blockchain.
Blockchain usage should also change the electricity industry's infrastructure, from massive centralized power plants to smaller distributed power plants and storage systems. This trend has already begun to appear as solar panels, and electric batteries for vehicles are connected to the grid. The major challenge for utilities would be to answer such questions confidentially to help power the next generation by transitioning to a “digital utility.”