Earlier this week, Russian tech startup Waves announced it has been testing a blockchain solution for payments in the retail electricity sector. The pilot program was initiated by Rosseti, Russia’s national energy grid operator, which is looking to automate and make transactions between energy producers, suppliers and consumers more transparent.
Now that the first stage has been successfully completed, the partners will proceed to scale up their efforts. Ultimately, they envision rolling the blockchain-powered solution out nationwide.
Blockchain and energy: What makes them work together?
According to Wood Mackenzie, a global natural resources research and consultancy group, the first documented use case of distributed ledger technology in the energy sector can be traced back to April 2016, when residents of Brooklyn, New York, started trading solar power via a blockchain peer-to-peer system. From that point onward, the technology has been gaining traction with the energy industry. The report goes on to say that investments in the blockchain-in-energy industry reached over $300 million between the second quarter of 2017 and the first quarter of 2018.
Indeed, these days, the energy sector is widely considered to be one of the most attractive fields for DLT. A 2019 academic study titled “Blockchain Technology in the Energy Sector: A Systematic Review of Challenges and Opportunities” reviews as many as 140 blockchain commercial and research initiatives within the field.
The most notable examples include Grid+, a blockchain energy company focusing on wholesale energy distribution, as well as Brooklyn Microgrid, the aforementioned blockchain-based peer-to-peer energy trading platform run by Transactive Grid, which is a collaborative startup initiated by LO3 Energy and Ethereum-centered company Consensys.
But what exactly makes blockchain a good fit for the energy sector? As per a 2018 Deloitte report,…