In the fast-moving and fast-evolving world of blockchain technology, every year feels like a watershed year. We expect that 2019 will be no different. In fact, as we look to the 10 remaining months ahead, it is shaping up to be the most exciting year yet, especially for blockchain in the energy sector. Here’s why, and what to expect.
More industry players than ever enter the market
After the vanguard of the earliest first-movers blazed the path, more industry incumbents than ever—energy companies, utilities, grid operators—make a decisive move to seriously examine blockchain technology. (Already earlier this year, the media extensively covered how Spanish utility Iberdrola and energy blockchain startup FlexiDAO—both EWF Affiliates—teamed up on an important solution related to the renewable energy market.) Many will establish new or grow existing internal blockchain centers of excellence. As the industry overcomes initial skepticism, incumbents gain growing confidence in the technology; it’s no longer a hypothetical / theoretical question of if blockchain has value to add, but rather what uses cases to target first and how fast solutions will be built, adopted, and scaled.
The Energy Web Chain launches its genesis block
Tobalaba, the Energy Web Chain’s version 1 network, has gained a fast following among EWF Affiliates and others that have already been busy building dApps and running pilot projects on the chain. But this year, Tobalaba will transition out of test phase as the Energy Web Chain goes live with version 2. The updated and improved Energy Web Chain will provide a scalable, low-cost, enterprise-grade platform that energy market incumbents and software startups alike can use to develop dApps and adopt blockchain-based solutions with confidence. For EWF, our Affiliates, and the broader industry, this will be the moment when we truly deliver on our promise of a robust blockchain tailored specifically to the energy sector.
Blockchain attracts a new wave of energy sector investment
Around this time last year, energy blockchain startups had famously attracted some $324 million in investment spanning the period Q2 2017 to Q1 2018; initial coin offerings (ICO) accounted for 75% of that total. Since then, arrival of a “crypto winter” has dampened enthusiasm for ICOs, at least temporarily for token markets. Yet as blockchain’s tremendous potential as a technological solution has gained awareness in the energy sector, we may very well see a new wave of energy blockchain investment, this time driven by equity (perhaps via security token) investments in startups whose blockchain and digital solutions can capture value.
Major, large-scale pilots bring blockchain closer to true commercial deployment
Within the energy sector and beyond it, most blockchain technology deployments have focused on fairly targeted, small pilot projects (despite some bold marketing proclamations to the contrary). In the energy sector, though, we’ll see an increasing number of truly major, large-scale pilots that bring blockchain closer to true commercial deployment, such as EWF Affiliate and Belgian TSO Elia using blockchain for demand response, EWF Affiliate and Netherlands grid operator Stedin’s unique layered energy system model for community-based energy trading, and the aforementioned Iberdrola-FlexiDAO collaboration on renewable energy solutions.
Using blockchain technology to facilitate EV charging events will receive major focus and attention
Many organizations, including EWF Affiliates such as Share & Charge and Wirelane, have been at the forefront of bringing blockchain-based EV charging solutions to market. However, to date most buzz on energy blockchain has been around so-called peer-to-peer markets. True peer-to-peer energy markets are interesting medium- and long-term concepts (considering the large number of technical and regulatory barriers that need to be overcome), but managing electric vehicle charging is a growing pain point for market participants here and now. We believe decentralized technologies can dramatically boost utilization of existing EV charging infrastructure, streamline payment and settlement (especially across myriad EVSE networks), enable customers and regulators to understand the “green-ness” of charging, and potentially make it possible for any outlet—from low-voltage garage outlets to 150 kW DC fast charging stations—to transact peer-to-peer. This could unlock dozens of new EV charging and management business models currently unavailable to the market.
M&A heats up as the nascent market starts to mature
And finally, we’ll start to see the first signs of winners and losers—not to mention mergers and acquisitions—as the energy blockchain startups with the most-viable, most-mature solutions gain favor among significant industry partners such as utilities and grid operators. As the global energy sector becomes more blockchain-savvy, claims that turn out to be vaporware will be exposed and those companies with real “meat and potatoes” solutions will emerge as preferred solution partners.
Jesse Morris is the CCO of Energy Web Foundation.