A year in blockchain – what’s coming for the energy sector in 2022
Blockchain has continued to mature and evolve with its growing use in the energy sector during the past year.
While the number of blockchain projects in the energy sector around the world is not known, in round terms we can put it upwards of 400 with around 300 vendors, based on Guidehouse Insights’ latest vendor and deployment tracker.
Guidehouse Insights reports tracking 385 total energy blockchain projects and 286 unique vendors since 2012. According to the analyst, deployments peaked in 2018 with growth slowing subsequently. And for the record, the top use cases are transactive energy and guarantees of origin, with the former accounting for almost one-fifth of the deployments.
Trends observed by Smart Energy International during 2021 include the continued evolution of blockchain as a technology and its further maturing from piloting to the mainstream with the longstanding players continuing to strengthen their market presence.
As examples, Energy Web upgraded the EW Chain and launched an initiative with Parity Technologies to enable blockchain customisation, and Australia’s Powerledger launched its next generation blockchain.
LO3 Energy continued to secure high level investment backing and Britain’s Electron reported achievement of a local flexibility marketplace on Orkney, while Catalonian grid operator Electra Caldense launched a distribution flexibility initiative.
In further integration of the mobility and energy sectors, Ford completed a long term demonstration on air quality with hybrid electric vehicles (EVs) and Volkswagen launched a project to advance EV charging.
And some novel use cases were launched, such as utilising blockchain for recycling of solar panels in Japan and nickel supply chain tracking for EV batteries.
Looking ahead, Smart Energy International highlights five trends for 2022.
Carbon tracking
A focus on carbon emissions and emissions reductions has moved to centre stage, occupying headlines like never before and shifting from primarily a national issue to one of record for companies of all shapes and sizes.
Towards the end of 2020 KPMG launched a blockchain-based climate accounting infrastructure and more recently the Swiss startup Watr has launched a solution targeting ESG goals.
As emissions reductions requires monitoring and reporting and as more and more companies take on this task, new solutions are expected to emerge.
Similarly the growing interest in green hydrogen is giving rise to the demand for tracking solutions for guaranteeing the green credentials, with the first such solution, GreenH2chain, launched by Spanish multinational Acciona.
Energy trading
Peer-to-peer trading, the original blockchain use case, still being piloted in some locations is also starting to enter the mainstream as innovative property developers build in distributed energy resources as standard.
Examples are a condominium complex microgrid in Johannesburg, a potential precursor to similar microgrid developments across South Africa and beyond, and another in Ontario, Canada.
In Fremantle, Australia, construction is under way of a development in which Powerledger’s technology is being built in.
Decarbonisation
The soaring price of Bitcoin and growing mining activities havs drawn increasing attention to their high energy consumption and has resulted in a shift by miners towards renewable powered energy resources.
The Crypto Climate Accord has been launched as an initiative for the crypto community to decarbonise the cryptocurrency industry and there have been calls to bring more transparency to the energy consumption of blockchains.
Energy Web, one of the Accord’s co-founders, had previously launched an app to decarbonise blockchains. New research has found marked differences in consumption between different blockchains.
Tokenisation
The use of blockchain for crowdfunding the development of renewables has been implemented successfully over years by companies such as Cape Town-based Sun Exchange.
The huge growth in renewables still anticipated and the movement for ‘democratisation’ of energy has given a new impetus to this use case, particularly for sub-Saharan and other vulnerable countries.
Wien Energie and Riddle&Code have launched a joint venture to deliver tokenisation solutions globally, built on the former’s citizen solar power plant model first introduced a decade ago.
Staking
Arguably one of the most significant trends coming to energy sector blockchains is staking, with both Powerledger and Energy Web set to offer the option.
Powerledger has reported working on two staking options – the primary one that will be available in early 2022 based on an Ethereum contract and a secondary, more decentralised solution that opens the chain as a public chain.
Energy Web anticipates staking to launch similarly in early 2022, with real world testing of the mechanism in phase one, followed by an opening up of the system to multiple service providers with their own staking pools in the second phase.
Energy Web believes that its staking is set to be the first utility token staking linked to real-world cash flows. Longer term, staking could correspond to an agreement to deliver a specific flexibility capacity to the grid with the potential to gain a bonus for delivery – or lose the stake in case of non delivery.
