BUSINESS
Blockchain in Energy By: Praveen Jujjuvarapu
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SHALE MAGAZINE MARCH/APRIL 2020
others for reducing disputes, lowering risks of fraud in delivery, ensuring payment certainty, offering transparency in trade asset movement, and providing improved flow of trade receivables. The energy trading segment accounted for the largest share of 47.2% in 2017 and is projected to reach $3,692.1 million by 2023, at a Compound Annual Growth Rate (CAGR) of 81.62%. Major Benefits of Blockchain in the Energy Sector • Shorter settlement cycles with efficient back-office processes • Better data standardization and streamlined regulatory reporting • Monetization of new blockchain platforms and creating new business models • Cost reduction & environmental sustainability • More focus on transparency of Energy stakeholders without affecting the privacy of the data • Removal of expensive market frictions and intermediaries • Improved visibility, collaboration and operating efficiency made possible by blockchain’s transparency Market Overview The global blockchain in energy market is projected to reach a market size of $7,110.1 million by 2023, at a CAGR of 78.32%, from an estimated $394.3 million in 2018. This growth can be attributed to the increasing need to manage the infrastructure, rising global security concerns, ensuring transparent and efficient transactions, increasing innovation in trade and supply chain management, and the growing number of blockchain start-ups across various industry verticals. According to an estimate, Europe is predicted to be the largest market for blockchain in energy
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lockchain technology is the simplest form of the public ledger and shared database that assists in identifying, tracking and tracing every transaction on the enterprise blockchain network. These transactions are recorded in the form of blocks. These blocks are added to the blockchain in a linear and chronological order. The blockchain technology provides secure sharing of information while making the process transparent and immutable for all the participants. The blockchain technology shows the various applications in the energy industry vertical, such as payments, data management, smart contracts, supply chain management and others. Blockchain technology in the energy sector would enable people to trade energy among themselves and transform their business operations and services by providing transparency and immutability. Blockchain technology has the future to alter the energy sector. Innovations such as rooftop solar, electric vehicles, and smart appliances have been driving the energy industry. Enterprise Ethereum blockchain uses smart contracts and systems interoperability to stimulate growth in upcoming technology in which energy and sustainability are less recognized. Blockchain also offers solutions for renewable energy distribution. To improve the efficiency of utility providers, the distributed ledger is being used to track the supply chain of custody for grid materials Oil and gas companies are majorly concerned about privacy and trade policies. Private blockchain networks provide data authorization and selective access to pre-approved parties. Private blockchains are also providing an interim solution with privacy features for businesses until the public blockchains start to implement the same. The blockchain technology is widely used in the energy market for various applications such as grid management, energy trading, government risk and compliances management, payment scheme, supply chain management, and
