Businesses would be significant winners from the rapid technological changes that could result from the combination of blockchain and artificial intelligence (AI) programming. The union of such technology offers massive gains in efficiency and performance to the way energy systems currently operate.
What is blockchain?
Blockchain is a revolutionary technology that could transform our understanding of ownership and trust in an open market. As the underlying technology behind the online currency phenomenon, Bitcoin, blockchain is often seen as a mere tool for cryptocurrency (digital currencies that use encryption techniques). However, this is just one of its many applications.
The blockchain itself is an online method of recording transactions. Each transaction is recorded in a sequence which creates a unique ‘chain’ of records, or ‘blocks’. The chain is put together in such a way that each entry cannot be changed once it has been recorded. This record of events is shared between all parties involved in the market, and is accessible by anyone with an internet connection.
How can blockchain revolutionise energy trading?
Blockchain can be used for any commodity, including electricity. It could rewrite how transactions in the future energy system are processed. Blockchain will enable a direct processing and recording of transactions, without the need for a trusted third party acting as a central mediator.
The new digital marketplace using blockchain allows for business to be handled directly and in a matter of seconds without the need for a central broker, reducing the cost of energy procurement. The blockchain promises a secure platform, minimising transaction costs for participants. The role of the trader could shrink as end users transact directly with suppliers. It is expected that in the future this could lead to significant cost savings for customers and eliminate inefficiencies.
How could blockchain disrupt the traditional energy market?
The new technology could affect the way non-commodity costs (NCCs) are charged in the future, and help better connect distributed generation to consumers. The process will allow the easy transit of renewable energy between consumers and producers, reducing grid costs and carbon emissions at the same time.
How can blockchain drive the smart energy revolution?
Once adopted, blockchain could potentially provide instantaneous supplier switching. The energy regulator Ofgem is already moving towards introducing a next-day switching for gas and power in 2020. Blockchain could push this further while also increasing transparency.
There are possible applications in smart metering, microgrids, smart technologies, renewable accreditation, energy security and grid resilience. With the adoption of smart metering and electric vehicles, the take up of blockchain would pave the way towards the use of artificial intelligence (AI) programming in the energy sector.
In combination with AI, blockchain would allow for the use of real time data for forecasting. Through clever analytics, algorithms and artificial intelligence programming we can unearth serious business insights. The adoption of AI is also going to increase the amount of automation, streamlining administrative processes and leading to big savings for businesses. Those businesses that can harness the power of their data can use the insights gained to grow and become more profitable.
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