The traditional business model for power utilities is evolving into a new landscape characterized by distributed power generation, including a focus on sustainability, and the penetration of smart devices such as smart meters and thermostats. Utilities are responding by investing in smart technology and upgrading grid infrastructures required to make the emerging power grid a reality.
As the power grid becomes more distributed, establishing trust among disparate stakeholders will be essential. Blockchain technology offers one promising approach. Blockchain provides a way for multiple parties to conduct and record transactions through a peer-to-peer network that replaces the traditional role of a central trusted authority. Blockchain platforms can be public (i.e., permissionless) like Bitcoin, with anyone allowed to submit a transaction and take part in validating other transactions. Or they can be private (i.e., permissioned), where only authorized participants can share and validate information. (For more information on how blockchain works, read our e-book, “Demystifying Blockchain”)
Blockchain can be applied to increase the efficiency of numerous processes in utilities. Beyond simply reducing costs, blockchain-based networks could help utilities disintermediate suppliers and even retailers throughout the energy market. While the potential benefits are substantial, utilities will need to understand the strengths and weaknesses of blockchain technology and assess how it can be best applied to solve their business challenges and achieve their strategic objectives.