As opposed to the traditional energy market, where there was one central power utility and energy users bought only from it, an energy market based on smart grid is decentralized, and users have various options from which to purchase their energy. EGM’s Meta-AlertTM System enables this and much more. This shift has opened new opportunities to formalize the actual transaction of purchasing energy. One of these opportunities is to use blockchain to carry out transactions in the energy market.
While being marked as a great promise by many, the use of blockchain in the energy market is not deficiency free. First and foremost are the high transaction costs that directly inflict on the profitability of choosing blockchain as the mean to carry out energy purchases. Blockchain is not yet accessible in the volume the electricity market requires. In addition, the lack of regulatory framework creates inherent uncertainty and further holds back that accessibility from progressing.
Furthermore, it is unclear to what extent the blockchain system is suitable to handle large amount of individual small transactions. While blockchain could perhaps be suitable for microgrids, there’s a significant doubt whether it could manage vast amount of transactions in a larger grid.
Another issue that needs to be addressed is the inherent incongruity of applying blockchain to a market that aspires to be as green as it can. The electricity market’s most dramatic change has been to shift from relying on oil and fossil fuel to rely on renewable energy sources. The use of blockchain, on the other hand, creates a very high carbon footprint. Thus, there is a certain degree of hypocrisy in using blockchain as it is today while promoting sustainability in the energy market. Blockchain technology needs first to adjust itself so as to bring it in line with the same values and market trends the electricity market has adopted.
In conclusion, in the coming years we will witness expansion of the field of distributed energy. EGM’s Meta-AlertTM System is an essential corner stone in that expansion. The dynamics of the energy market open the door for new opportunities of virtual trade. Having said that, the technology of blockchain and cryptocurrencies might seem full of glam and magic of a fantastic new world, but when push comes to shove these technologies are not yet ripe for the energy market. It will certainly be interesting to stay tune and see how the aforementioned challenges are met by the blockchain advocates.