DUBLIN, March 21, 2019 /PRNewswire/ — The “Blockchain Market in the Energy Sector – Growth, Trends and Forecast (2019 – 2024)” report has been added to ResearchAndMarkets.com’s offering.
The Blockchain Market in the Energy Sector market is expected to register a CAGR of over 67.23 % during the forecast period 2019 – 2024.
The blockchain technology, which has greatly benefitted the financial sector, finds applications in the energy sector predominantly for wholesale energy trading. However, the increasing number of use cases and efforts from the regional blockchain associations are promoting the adoption of the technology for various other applications like smart contracts and digital identification.
The increasing investment activity across the emerging vendors, like LO3 and Electron, among other 100+ startups, in the market enable the vendors to actively invest in more research and innovation for developing blockchain solutions for the energy sector. Considering that the innovation would be user-driven, such investments would increase the trust among the energy market participants to adopt blockchain technology.
Utilities are expressing their interest in the technology by investing in blockchain startups. For instance, Utilities like Tokyo Electric Power Company, a Japanese utility company has invested in the Energy Web Foundation, to accelerate the commercial deployment of blockchain technology in the energy industry. In 2017, the Japanese utility has also made investments in Electron, a UK-based blockchain vendors specializing in the energy sector.
Centrica, a prominent British multinational utility giant, is set to invest in LO3, in partnership with Braemar Energy. Similar investments have also been made by RWE, a German power company in 2017. LO3 Energy has also received investments from Siemens, a prominent player in the energy sector. The vendors are also closely working with Siemens to develop a blockchain enabled transactive energy platform for environmentally-friendly electricity.
The blockchain technology is currently under testing phase across the United States and the United Kingdom, among others. The technical and costs constraints of the blockchain technology might challenge the technology adoption in the energy sector. The blockchain technology for the peer-to-peer transactions may neither be particularly cost-effective nor can be easily scaled to support massive transaction levels in the long run. The presence of very few use cases that can emphasize on the scalability of the technology and the cost associated is the reason for the blockchain technology not being viewed as a cost-effective solution in the long run.
For peer-to-peer trading, blockchains would need to handle transactions of just a few kilowatts, which may take a minimum time span of 15 minutes. The costs associated with the transaction may be worth just a few cents in traditional methods, considering the amount of trading. The Bitcoin trading fee, for instance, has increased significantly from the last quarter of 2017 to 2018. Currently, a USD 16 fee is being imposed for a USD 25 bitcoin transaction. Such high trading fee of bitcoin and other 1600 cryptocurrencies used across regions for trading makes the blockchain technology expensive, in terms of handling huge transaction levels in the long run of peer-to-peer trading.
The Scope of the Report
The energy sector has certain limitations, including high administration and transmission costs mainly, due to the centralized functioning of the sector. As blockchain addresses these issues and decreases the scope for single point failures and increases transparency across the supply chain, the technology is expected to be a noteworthy digital transformation for the sector.
The blockchain technology, which has greatly benefitted the financial sector, finds applications in the energy sector predominantly for wholesale energy trading. However, the increasing number of use cases and efforts from the regional blockchain associations are promoting the adoption of the technology for various other applications like smart contracts and digital identification. Blockchain enables energy transmission companies to track the movement of excess energy thereby managing the supply-demand bottlenecks.
Key Market Trends
Smart Contract is expected to register a Significant Growth
The Smart Contract is the computer-aided program, which encodes the different conditions and possible outcomes and moves the currency or information across the ledger using blockchain technology. Blockchain with the use of smart contracts is anticipated to reduce the number of different administrative processes, which involves the deal of execution.
The smart contract enables consumers to execute and dispatch various commodities automatically, once the trade is booked. By reducing the involvement of multiple intermediaries, Blockchain will decrease the time and costs involved in executing these transactions.
For instance, ING and Socit Gnrale S.A. decided the first oil trade by using a prototype of the Blockchain platform, (Easy Trading Connect). ING also anticipated the usage of Blockchain would help to reduce its involvement in the transaction from 3 hours to 25 minutes, which results in 30% cost savings per transaction.
The rising acceptance of electric vehicles (EVs) and the lack of coordination between consumers and charging stations enabled the adoption of smart contract solution. As, smart contract aid the EV’s to charge or discharge based upon the needs of the electric grid, which enables the vehicles to act as mobile batteries and to help stabilize the grid. Furthermore, the high adoption of smart contract solutions are expected to reduce labour costs, manual and semi-automated processes, capital costs through faster settlements, and technology costs by decreasing dependency on redundant systems.
North America is Expected to Hold Major Share
With blockchain adoption in the energy sector, transactions such as energy trading can be recorded and settled almost instantly, with no need for an intermediary and with little need for reconciliation since all parties are using the same platform. North Americans as early technological adaptors are having significant adoption of blockchain in the energy sector.The region is experiencing an increasing number of investments and partnerships, since the first blockchain in energy transaction took place, in 2016, in Brooklyn, New York. Companies in the region are partnering with other countries or having high investments to develop products related to energy sector using blockchain technology.
For instance, Bovlabs, a startup working to empower clean energy, entered into a partnership with Enchanted Rock, to test blockchain’s ability to bid into wholesale markets, with the ERCOT (Electric Reliability Council of Texas), and is expected to enter as a blockchain-based retailer in energy sector.
In another instance, LO3 Energy entered into a partnership with Energy Web Foundation (EWF), to work on standardizing data for use in EWF’s blockchain, which is designed specifically for the energy industry. As said by the LO3’s CEO, creating a data standard for transacting energy across projects and users, will be vital to meeting blockchain’s potential. Omega Grid software is operating on-site at the Stone Edge Microgrid, to test the blockchain based software’s ability to calculate optimal power flow and locational price, for each asset, on 5-minute intervals, and accept the best bids from the asset to control the load.
The Blockchain Market in the Energy Sector is highly competitive and consists of several major players. In terms of market share, few of the major players currently dominate the market. These major players with prominent share in the market are focusing on expanding their customer base across foreign countries. These companies are leveraging on strategic collaborative initiatives to increase their market share and increase their profitability. The companies operating in the market are also acquiring start-ups working on Blockchain Market in the Energy technologies to strengthen their product capabilities.
In July 2018, Microsoft Corporation announced the launch of the Enterprise Blockchain partnership, in Taiwan. The company has entered the partnership with Digital China and Hot Cool, in the hope that the three companies can use blockchain technology to enhance financial, e-commerce, entertainment, and other industries.
Key Topics Covered:
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
4.1 Market Overview
4.2 Introduction to Market Drivers and Restraints
4.3 Market Drivers
4.3.1 Emergence Of Variable Electricity Rates And Need For Peer To Peer Trading
4.3.2 Aggressive Spending By Venture Capitalists
4.4 Market Restraints
4.4.1 Scalability Constraints
4.5 Value Chain / Supply Chain Analysis
4.6 Industry Attractiveness Porters Five Force Analysis
5 MARKET SEGMENTATION
5.1 By Application
5.1.2 Smart Contracts
5.1.3 Digital Identities
5.1.4 Governance, Risk, and Compliance Management
5.1.5 Other Applications
5.2.1 North America
5.2.3 Asia Pacific
5.2.4 Latin America
5.2.5 Middle East and Africa
6 COMPETITIVE LANDSCAPE
6.1 Company Profiles
6.1.1 SAP SE (SAP)
6.1.2 Microsoft Corp
6.1.3 Accenture PLC
6.1.4 IBM Corporation
6.1.5 LO3 Energy Inc.
6.1.7 Drift Marketplace Inc.
6.1.8 IOTA Foundation
6.1.9 Btl Group Ltd
6.1.10 Power Ledger Pty Ltd
6.1.12 Electron (Chaddenwych Services Limited)
7 INVESTMENT ANALYSIS
8 MARKET OPPORTUNITIES AND FUTURE TRENDS
For more information about this report visit https://www.researchandmarkets.com/research/929sqt/blockchain_market?w=5
Research and Markets also offers Custom Research services providing focused, comprehensive and tailored research.
Research and Markets
Laura Wood, Senior Manager
For E.S.T Office Hours Call +1-917-300-0470
For U.S./CAN Toll Free Call +1-800-526-8630
For GMT Office Hours Call +353-1-416-8900
U.S. Fax: 646-607-1907
Fax (outside U.S.): +353-1-481-1716
View original content:http://www.prnewswire.com/news-releases/blockchain-market-in-the-energy-sector-2024—emergence-of-variable-electricity-rates-and-need-for-peer-to-peer-trading–aggressive-spending-by-venture-capitalists-300816585.html
SOURCE Research and Markets