How Blockchain will Change the Future of the Energy Sector?

“If you cannot understand it without an explanation, you cannot understand it with an explanation. – Haruki Murakami “

What is blockchain?

Understanding blockchains can be technical and tricky, if you haven’t been involved in the crypto space. However there is a lot of information and resources online with regards to this ground-breaking technology. Blockchains are not products that you just turn on and start using, like any other product out there.

“So, what is the “Blockchain” and why we as day-to-day consumers should care?”
It is the technology that is likely to have an enormous impact on the future of world economy and will change and shape our lives in the future.

Blockchains are new technology layers that rewire the Internet and threaten to side-step older legacy structures. Trust resides at the core fabric of the blockchain network which has the ability to potentially remove intermediaries or disrupt their current operating models. This revolutionary and simple protocol allows transactions to be simultaneously and securely maintained utilising a decentralised public or private ledger. It ensures consensus regardless of the origin of those who use it and this decentralised paradigm shift will change our future perception of how we understand transactions, flow of data & information, and financial services going forward.

Blockchain framework has the ability to virtually record everything and distribute anything of value and will challenge and disrupt present centralised business models and the energy sector - no doubt.

Present Energy Supply Chain Model

The current global electricity market is $2 trillion which is naturally closed and controlled by a handful of large players. Energy companies are incentivised to sell more energy and at the highest possible price.

The market for power (electricity) generation is naturally becoming decentralised, more and more individuals and businesses are generating their own energy through renewable sources. However, they are still selling this energy back to the big energy companies.

The existing model in the energy marketplace has four main issues:

Centralised – A small number of large energy companies supply millions of customers who are price takers.
Transparency – Markets are illiquid and in the hands of financial brokers. Electricity is traded Over-The-Counter (OTC) between energy companies or banks and therefore there is no transparency to users of energy.
Lack of incentives to use less energy – Energy companies make money from selling more energy, so consumers are not incentivised to change behaviour.
Lack of competition – Barriers to entry are high, with complexity of regulation and costs of entry being the two main reasons for the monopolies operating in all major power markets globally.
Consumers are showing a greater desire to have control over how their energy is generated and distributed. Many domestic consumers are now both producers and consumers of electricity, for instance through rooftop solar panels or wind turbines. They are motivated by financial and environmental concerns, as well as low levels of trust in large energy suppliers.

“We could see more consumers move away from the traditional utility model and adopt community schemes or peer-to-peer trading arrangements to provide their energy needs instead”
OFGEM, UK Energy Regulator

Future Energy Model

The emergence of blockchain and smart contracts will have a huge impact on the way the energy market conduct their business and deliver value to their consumers.

Furthermore, the advancement of Artificial Intelligence (AI) and Internet of Things (IoT), the introduction of smart meters, Electrical Vehicles (EV), renewable & clean energy, the evolution of our cities into Smart Cities; will create a Smart Grid and transform the way we generate and consume energy.

The Smart Grid will be able to connect consumers (Prosumers) that produce and store energy with consumers that have a demand for energy consumption through a peer-to-peer network, while bypassing the utility incumbents. All transactions will be securely stored and visible on the blockchain.

Under the new model, energy companies themselves will not necessarily be displaced, however their business models will be forced to adapt to the new economy.

Energi Mine Solutions

Our focus at Energi Mine is to reduce global energy consumption by incentivising through the token model. We are building an energy ecosystem, a new market using blockchain at its core. The platform we are building will have two aspects; a peer-to-peer marketplace to buy & sell energy and a reward platform.

The peer-to-peer marketplace will connect generators and consumers on a common platform, bringing transparency to a notoriously opaque market. Members will be able to benefit from this disintermediation by connecting directly with each other, without an energy company/broker in between.

The platform will ensure prices are always truly market reflective, as opposed to being kept artificially high by the current monopolies we see all over the world.

This new concept of combining AI + Blockchain will lead to:

A reduction in global energy consumption
A reduction in retail energy prices
The creation of an ecosystem, including a transparent peer-to-peer platform to trade energy
Energi Mine - Decentralising global energy markets by rewarding energy efficient behaviour | Power to the People.

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