What is Blockchain Technology in the Energy Sector?
Written By: Maya Ardon
Edited By: Vanessa Lu Langley
Blockchain is a technology used for storing and transmitting information and makes up a distributed database network among its users. A key characteristic of blockchain is that it is decentralized, meaning that it securely operates through its users without a central review body or any third parties. In other words, the blockchain takes away the need for information to be centralized by a third party because it is a public record (Energy Encyclopedia, 2018).
Blockchain applications in the energy sector have been examined as new opportunities due to its potential to legitimize energy transfers between producers and consumers in a secure and efficient manner without going through a centralized supplier (Energy Encyclopedia, 2018). For example, this can allow electricity to be consumed and exchanged on a local loop which can provide electricity to areas that do not have access to energy (Energy Encyclopedia, 2018). Research shows that blockchain may provide a solution to some current issues faced by the energy sector by providing cost savings and improving efficiency (Andoni et al., 2019).
Blockchain Uses and Applications in the Energy Sector. Energy Encyclopedia. (2018). Retrieved April 10, 2022, from https://www.encyclopedie-energie.org/en/blockchain-uses-applications-energy-sector/
Andoni, M., Robu, V., Flynn, D., Abram, S., Geach, D., Jenkins, D., McCallum, P., & Peacock, A. (2019). Blockchain technology in the energy sector: A systematic review of challenges and opportunities. Renewable and Sustainable Energy Reviews, 100, 143–174. https://doi.org/10.1016/j.rser.2018.10.014