This blog post is adapted from a new discussion paper from the Energy Security and Climate Change Program: “Applying Blockchain Technology to the Electric Power Sector.”
This blog post is co-authored by Varun Sivaram and Madison Freeman, research associate for energy and U.S. foreign policy at the Council on Foreign Relations, and was adapted from a new discussion paper, out today, from the Energy Security and Climate Change Program: “Applying Blockchain Technology to the Electric Power Sector,” by David Livingston, Varun Sivaram, Madison Freeman, and Maximilian Fiege.
Electric power systems around the world are rapidly changing. For over a century, these systems have relied largely on centralized, fossil fuel plants to generate electricity and sprawling grids to deliver it to end users. Utilities had a straightforward objective: provide electricity with high reliability and at low costs. But now, governments have new ambitions for electric power systems. Many are requiring these systems to rely heavily on volatile wind and solar power; several are also aiming for a high share of electric vehicles (EVs), which can strain grids. Further complicating the matter, customers are installing their own equipment—from solar panels to batteries and smart appliances—to control their production and consumption of electricity.
As utilities struggle to sustain reliable service, meet new policy objectives, and cope with rising complexity, innovators are peddling a putative solution: blockchain technology. Proponents of blockchain technology liken its potential to that of the internet three decades ago. And in 2017, start-up companies raised over $300 million to apply blockchain technology to the energy sector. But so far, little of this potential has been realized.
Our new discussion paper aims to add some order to the chaos of blockchain mania. We assembled the largest publicly available dataset of initiatives applying blockchain to the electric power sector. We interviewed dozens of startups, nonprofits, and established firms. And we dove deep into three case studies of leading startups with pilot projects across multiple continents.
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