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Can blockchain tech help solve climate change?

Photo of: Joseph Stone
by Joseph Stone

With their decentralized system and their booming course since last year, cryptocurrencies fascinate more than ever. For the private individual, cryptocurrencies are the promise of a decentralized system that breaks with the traditional rigid banking framework. For manufacturers, cryptos are above all the embodiment of a technology that is in the process of revolutionizing all the different professions: the blockchain. Recently, a report by a European working group examined the use of the blockchain in the energy sector.

CIGRE is a well-known organization in the field of energy engineering (nuclear, hydraulic, etc.). Created in 1921 in Paris, CIGRE is an international community of experts in the sector. These specialists work collaboratively on current and future energy market issues. In total, CIGRE brings together some 60 national committees in more than 90 countries around the world.

In all, CIGRE is composed of more than 15,000 members who work in 250 working groups. Each working group (WC) is dedicated to a particular issue. Working Group C5.30 is the one that works on the role of blockchain technology in the energy market.

In a preliminary report, the C5.30 group points out that blockchain technology is still underused in the energy sector. About a dozen companies use the blockchain for their activities related to trading, recharging electric vehicles, tracking renewable energy, etc. Yet, as the report acknowledges, the blockchain has “the potential to significantly improve the energy market.

What the use of the blockchain would bring to the energy market
The advantage of the blockchain is that it is a technology that ensures a high level of security and transparency. Moreover, by operating on the basis of “intelligent contracts”, it does not need a third party entity to operate. In fact, once the activation conditions are met, the contract is automatically executed. This results in significant operational and budgetary efficiencies.

Thanks to this unique technology, the blockchain could provide concrete solutions to some of the problems encountered in the energy sector. For example, according to the CIGRE C5.30 group, the blockchain could greatly facilitate the management of electrical networks. Blockchain technology is perfectly adapted to manage the balance between supply and demand between different networks.

The blockchain could also facilitate the exchange of network data at the border level. Indeed, with the blockchain, the data would be stored and therefore shared at any time between the actors concerned. The C5.30 group identified other areas that could be improved by using the blockchain, such as :

  • Adequacy of energy resources
  • Coordination between the different energy operators
  • The price of electricity lower than its production cost