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Strengths and limitations of the Blockchain for the electricity sector according to Eurelectric
In a report published in May 2018, Eurelectric, the trade association that brings together the electricity industry in Europe, undertook to take stock of the Blockchain’s promises and their growth potential in the energy sector. It concludes that despite its potential value, the future of the block chain in electrical systems is uncertain.
Eurelectric Power Summit, 2018 – Photo credit David Plas for Eurelectric
Eurelectric reviewed 40 BlockChain projects across the spectrum: wholesale and retail markets, flexibility services, electric vehicle charging and network security. In March 2018, these 40 projects brought together 122 players in the sector. Between the second quarter of 2017 and the first quarter of 2018, these projects mobilised €240 million from venture capital or raised (75%) through Initial Coin Offering (ICO).
In this report, Eurelectric successively presents the main characteristics of BlockChain technology, assesses the contribution of this technology to the electricity sector, and then reviews the value propositions generally put forward by BlockChain developers through a review of ongoing projects and experiments. The conclusions of the report are largely based on the contributions of the members of the Blockchain Discussion Platform.
According to Eurelectric, the Blockchain “offers solutions to ensure the validity of a transaction by recording it on a connected distributed system of registers, all of which are linked by a secure validation mechanism. It allows players to agree on a common digital system without having to rely on a trusted third party. Some industry experts predict that block chain technologies will accelerate the transition to a more distributed energy industry, allowing more accurate and timely transactions. Despite its potential value, the future of the BlockChain in electrical systems is uncertain. Commercial BlockChain projects face a scalability problem. High costs, slow transactions and other limitations and risks make it difficult to apply this technology to the electric power sector, due to its unique properties such as the presence of economies of scale and scope in grid operations.”
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Source: Eurelectric, Blockchain in Electricity : a Critical Review of Progress to Date