One overlooked aspect of the advent of cryptocurrencies such as Bitcoin is the blockchain technology that helped birth it – a technology that can disrupt, and transform, a whole host of market sectors of the global economy. One such area is the oil and gas sector, where so much of the conventional discussion and media attention has been pre-occupied with the development of fracking.
The world’s energy systems are evolving with the aid of blockchain technology “as a greater share of renewable energy is being integrated into electricity grids thanks to smart grid technology, the proliferation of rooftop solar systems, and better battery storage,” said Dr. Yongping Zhai on the Asian Development Blog. “This technology comes at the right moment to support the transformation of the energy sector.” Dr. Zhai is an energy sector technical advisor for the Asian Development Bank.
According to Dr. Zhai, blockchain technology can facilitate the evolution of national energy sectors in a number of ways:
1. Capacity building and institutional strengthening. With the proper support from development institutions, “energy regulators and power utilities use blockchain to improve their financial management,” he explained. “The technology can then help the companies register and record the ownership and current state of assets, digitize contracts, and verify and execute metering and billing transactions.”
2. Modernizing grids. Existing energy industry processes can be made more efficient by utilizing blockchain technology “as the backbone for the smart grid systems that automatically diagnose and respond to network emergencies and problems,” Dr. Zhai pointed out.
3. Renewable energy mini- and microgrids. “Blockchain empowers individual consumers and producers,” he said. “When each household that can generate and store electricity can enter into automated, peer-to-peer transactions with other households or sell power back into the grid at the market price, the households (consumers) become ‘pro-sumers.’ ”