How Blockchain Can Impact The Energy Industry

Just picture how an electricity grid looks like. All of the electrons that are gathered by the wind or the sun aren’t comparable to the ones received from fossil fuels. Governments around the globe are working hard on creating systems in order to keep track of how much clean energy is produced.

This is where the blockchain technology comes in handy. New systems that are based on the blockchain could help and improve the way we gather data about the produced and spent energy. This way, by keeping track of renewable energy, we can solve critical data management challenges without heavily disrupting the business. This technology can transform the basis of the grid itself.

The blockchain works as an encrypted ledger operated by a network of computers that can verify transactions and transfer funds between users. This technology proved itself to be very helpful in industries where networks of electricity producers and consumers depend on shared data.

If a renewable-power plant creates a unit of electricity today, computers will gather this data and will log it into a spreadsheet. This spreadsheet will later be sent to a registry provider and ends up as a certificate. Brokers, buyers, and sellers of these certificates verify the content after they are purchased.

The current electricity sector is based on a large number of centralized power plants which generate power and transmit it over long distances. But as the technology evolves, you can see some more ‘’decentralized’’ power generators such as rooftop solar panels, vehicle batteries that are connected to the grid. Owners of these systems are working very hard to maximize their profits because the system is very inefficient. This is why they are working on implementing blockchain technology where people will trade energy between themselves even neighbors and family.