Green Ledger: Is Blockchain the Key to Achieving Transparency in Energy?

Blockchain’s role in green energy and broader sustainable and transparent supply chains could be a game changer.

A report projects the global Blockchain market in energy will reach $1,564 million by 2026, up from $127.5 million in 2018. It is growing at a CAGR of 37.6%. The Green Ledger is a new technology that is changing how we track and account for carbon emissions. It could speed up the shift to a sustainable future and is getting industry attention. 

Have you ever wondered how we could speed up adopting renewable energies? How can we transition to a greener future? The answer may lie in an unexpected place: blockchain technology. You’ve heard about blockchain powering cryptocurrencies like Bitcoin. But blockchain is much more than digital money. It’s a secure digital ledger. Smart contracts can help with some of the biggest challenges in renewable energy.

Renewable energy production is often unpredictable and intermittent. The sun isn’t always shining, and the wind isn’t always blowing. Blockchains also give transparency and security. This can help attract more investment in renewable projects, so while blockchain may have enabled cryptocurrencies, its potential will increase. The transition to renewable energy may be an even greater legacy. The future is bright with blockchain and green energy.

In this blog, I share my thoughts on the Green Ledger. Is Blockchain the Answer to Energy’s Transparency Quest? Why is it essential? What challenges does it face, and what immense rewards does it offer our world and society? Here. We. Go.

The Challenge of Transparency in the Energy Sector

Some initiatives have emerged. But, the energy sector still needs to adopt blockchain. Blockchain tech offers solutions to promote sustainability. But, there are still challenges to overcome. For example:

Scalability and Power Consumption

Public blockchains need lots of energy per transaction. They can also have long delays when confirming transactions. As the technology develops, we must improve it.

Bitcoins provide an example of the time and power requirements of public blockchains. A Visa transaction uses 0.001 kWh of power, while a Bitcoin transaction uses about 740 kWh each (2020 data). Visa can process up to 65,000 transactions per second. Bitcoin transactions can take minutes to hours to confirm.

Lack of Clear and Consistent Regulation

We have finished regulatory work. Yet, blockchain procedures have started in areas like Japan and Europe. Global regulations are the main obstacle. They block blockchain adoption in energy. We need regulations to manage the future. Decentralized energy system, regulate electricity rates, and cancel potential disputes and transactions.

Limited Grid Infrastructure

To optimize, we need a smarter interconnected system. The energy sector network utilizes blockchain. New players can add to existing smart meters.

51% Attacks

For some blockchains, attackers can control the majority of the network. They can use this control to disrupt new block recordings. It stops transactions from executing. This attack poses a bigger threat to small networks. Taking over 51% of large blockchains would take huge computing power.

Blockchain Technology: A Primer

In many ways, Blockchain signifies the dawn of a new era in storing and exchanging value. It is one of the biggest technological breakthroughs in recent history, like the advent of the Internet in the early 1990s. At that time, the Internet provided a new and better search method. It shared information that was much more efficient and clear.

Blockchain is the technology behind cryptocurrencies like Bitcoin. Cryptocurrencies are one of the uses of the technology called blockchain. Developers created a blockchain to solve a particular problem. Storing and transferring digital assets (like cryptocurrencies) between two peers without an intermediary. There are only two ways to do digital transactions. You can do them via third parties. These include banks, credit card processors, or bitcoin-like networks. They verify the parties, confirm their asset holdings, and verify transactions between two parties. This network doesn’t act as an intermediary. Entities such as banks need to perform checks and balances as third-party intermediaries.

Leveraging Blockchain for Transparency in Energy Transactions

In recent years, there has been a growing emphasis on transparent energy transactions, driven by several factors. Concerns over climate change, the rise of renewable energy sources, and the demand for equitable energy markets have all contributed to this shift.

Blockchain technology presents a promising solution to these challenges. It provides a decentralized, transparent, immutable ledger. That records and tracks energy transactions and tamper-proof.

• One key advantage of using blockchain for transparent energy transactions is its ability to end them. We need centralized middlemen, including energy brokers, clearinghouses, and regulators.

• Blockchain reduces the risk of fraud or data tampering. It does this by decentralizing transactions. This also speeds them up and makes them more efficient.

But, blockchain offers many benefits for transparency in energy transactions. Addressing challenges and risks is also necessary. These include scalability issues, regulatory uncertainties, interoperability concerns, and potential security vulnerabilities. 

How Blockchain Could Be a Game-Changer for Energy Transparency

Blockchain companies and energy companies make good teams. This is because blockchain ensures the secrecy and openness of transactions. This technology removes middlemen. It allows smart contracts. Both parties execute the agreed terms when they meet. The blockchain energy industry will also reduce costs and increase privacy.

• Cost Reduction

The energy sector usually relies on complex networks and multi-participant supply chains. For example, making and selling oil involves many steps, including exploring, getting, refining, moving, and selling it. Blockchain can help organize the parties involved in these activities. It ensures smooth communication, speeds up processes, and removes supply chain inefficiencies. Such optimizations can lead to significant savings for an organization.

• Improved Transparency

Blockchain in energy also has valuable features. It can improve transparency in a multi-party network. Every network member has a copy of the blockchain ledger, so it is easy to verify the information. Also, the blockchain is immutable. You cannot change entries in the ledger. It can also improve compliance across the industry.

Companies can still control their sensitive data. This is important in an industry that relies on trade secrets.

• Decentralization and Programmability

Decentralized blockchain. Peer-to-peer networks using it can operate without central oversight. Besides, smart contracts can regulate events between network participants. This suggests the level of security that such systems can achieve. It shows how blockchain can aid innovation in the energy sector.

Energy blockchain can speed up the adoption of smart meters. It allows more efficient energy use by improving networks. The technology can also help connect end users to the web.

• Digitalization

Another exciting feature of blockchain technology is the ability to digitize physical assets. Smart contracts can digitize any asset and store it as tokens on the blockchain. This could change energy commodity trading and create new ways to trade excess energy, carbon emissions, etc.

Successful Implementations of Blockchain in Energy Transparency

If you count blockchain case studies in the energy industry, you will find many. Blockchain offers many advantages that enable its use in various practical applications. We’ve made it easy by listing some popular uses of blockchain in the energy sector.

•  Shell

Shell believes that blockchain is the key to easing the energy transition. The company is exploring blockchain. It wants to use it to promote sustainable fuels in transport. Also, the company may use blockchain. It will confirm carbon offset programs. It will do this by tracking the effectiveness of nature-based solutions. These solutions store carbon and avoid emissions.

• WePower

Marubeni, a Japanese company, backs WePower. It is an Australian blockchain company. It connects green energy providers to energy buyers, like investors and end users. Among these, they can buy energy in advance at a lower price. To do this, the company created Ethereum Smart Energy contract tokens. They will sell them on its e-commerce platform.

• Engie

The French energy giant has spent over 1.5 billion euros on digital change in the past decade. It leads to blockchain. It manages energy transactions. This includes supply, distribution, and use. The company also uses blockchain to trade Renewable Energy Certificates (RECs). It also uses it to enable peer-to-peer energy trading and charge electric cars.

•  Power Ledger

The Australian company makes software and technology. It dedicates itself to increasing renewable energy availability. In April 2020, the company partnered with French renewable energy provider ekWateur. They created a blockchain energy trading system. It lets users choose their preferred energy source in France.

Future Outlook: The Role of Blockchain in Shaping Energy Transparency

Blockchain technology is growing in the energy market. This is due to the need for decentralized and clean energy. The technology offers transformative solutions for supply chain optimization and renewable energy integration. The market is changing. Teamwork, innovation, and partnerships in energy will be key. Unlocking blockchain’s full potential requires them.

Sustainable energy is essential to reducing greenhouse gas emissions. But, many challenges exist, including using renewable energy sources, generation capacity, and storage. Blockchain is a fast-growing innovation. It can impact these issues. It lets energy companies make better choices. There are important barriers to addressing these challenges. They include improving transparency and network capacities. Since, various fields use blockchain. We need more research on the technical specs and how to install blockchain. Also, we need to research the hardware or platform that supports it. This special issue aims to cover two things. First, it will review the current state of technology. Second, it will cover the prospects for using blockchain in sustainable energy.

With over 15 years of experience, Cubix can provide a reliable solution to any energy transparency issues. Developing blockchain technology solutions for various sectors, Cubix has the perfect toolkit and developers to provide you with any blockchain services you need, ready to lend a helping hand and bring your ideas to life. Contact us, and let’s explore the new trends of smart blockchain technology together!