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This content is taken from the EIT InnoEnergy & EIT Digital's online course, Blockchain in the Energy Sector. Join the course to learn more.

Skip to 0 minutes and 14 seconds The energy industry used to be simple. Vertically integrated utilities sat in the middle of the system, threading a web out to the last consumer requesting a connection. While some utilities try to position themselves as consumer-focused, the reality is that even the most progressive are only rephrasing an old narrative that pushes citizens into categories of consumers. And consumers are fed a steady diet of price and product. But times are changing! A global technology revolution has changed the power balance between consumers and centralized power authorities. The booming market in Distributed Energy Resources (DER) like solar photovoltaic systems (PV), batteries, and micro-grids has moved the power balance from central authorities to the edges of the grid, to where citizens have control.

Skip to 1 minute and 1 second It’s not just about controlling the cost of energy consumption; It’s a reflection of peoples’ desire of having a more sustainable, more socially responsible, more local, more resilient and more democratic energy supply. All that is needed to turn the revolution into a reality is a model for energy trading that takes control out of the hands of central players and puts it in everyday citizens.

Skip to 1 minute and 23 seconds Let’s check out some facts: The current electrification state of the global population is at 84%. Advanced and transitional economies require secure access to modern sources of energy, to underpin their development and growing prosperity. In developing countries, access to affordable and reliable energy is fundamental to reducing poverty, improving health, increasing productivity, enhancing competitiveness and promoting economic growth. Hundreds of millions of people have gained access for the first time to modern energy over the last two decades through distribution networks, especially in China and India. This means that more people on Earth than ever before are now connected to ever-growing and interconnected electricity networks. This creates an enormous appetite for innovative new energy peer-to-peer (P2P) energy transaction platforms.

Skip to 2 minutes and 13 seconds In parallel, other factors are raising the electricity demand across the globe. The year 2015 saw the global threshold exceed 1 million Electric Vehicles (EV) on the road, with the total number closing at 1.26 million. EVs are expected to reach price parity with combustion engine cars by 2025. The deployment scenarios for the stock of EVs range between 2 to 20 million EVs by 2020 and 18 to 60 million by 2025.

Skip to 2 minutes and 43 seconds In Australia, between the years 2011 and 2016, local generation on residential roofs surpassed connections to the grid.

Skip to 2 minutes and 52 seconds There is an inconvenient truth facing the traditional energy industry: at some stage, it will be cheaper and more effective to self-supply than to rely on the network. It might happen in five years or it might happen in two. According to research, for some consumers it has already happened. It is natural to picture the energy networks, of which the sole purpose is the provision of energy, competing against DERs. There is an alternative to this competition, and it can help to preserve the value of existing network assets, and at the same time to reduce the risk of investment for the people co-creating the energy system of the future. We need to re-imagine the network as a decentralized and “trustless” trading platform.

Skip to 3 minutes and 32 seconds The increase of DERs means that our distribution system has now bi-directional flows, with energy being consumed but also being injected from many different points. At a residential level, consumers are injecting energy into the network and feeling under-rewarded for their contribution. A network that allows consumers to get value from their investment in DER offers an additional value proposition that will encourage even greater investments in distributed renewables.

Skip to 3 minutes and 59 seconds These users are called prosumers: Consumers who become involved with producing or storing electricity for their own needs. This new paradigm will not arrive by the hand of a small number of large-scale centralized investments, but by millions of micro-investments distributed across the system. The users have the power. A trading platform is a network that allows prosumers to sell energy to their peers in a safe and trustworthy environment. It allows them to monetize their energy surplus in the same way Uber allows to monetize their cars and AirBnb their spare rooms. And how is this trustworthy?

Skip to 4 minutes and 36 seconds A trading platform with millions of transactions between hundreds of thousands of traders across 5 minute trading intervals would be almost impossible to support without a central player taking control of everything. There’s a need for a system that helps securing all parties’ data, prescribing fees, requiring trust and providing accuracy. Does it sound familiar? That’s right, Blockchain technology. Blockchain-enabled P2P energy trading will transform energy networks into trading platforms, creating a new paradigm of empowered users. This lesson and the following ones have been developed in collaboration with Power Ledger, a company providing a solution for this exact situation.

Skip to 5 minutes and 18 seconds As a leading figure in the implementation of blockchain technology in the energy sector, stay tuned to discover how they are driving the energy sector towards its future.

The new energy paradigm

The energy sector is experiencing a transition to a new paradigm, and blockchain is one of the key enablers of this transformation.

A lesson from Oriol Pujoldevall, Blockchain specialist & lead educator

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This video is from the free online course:

Blockchain in the Energy Sector

EIT InnoEnergy