Past, Present, and the Potential Future of Blockchain in Electric Utilities

Is blockchain a past, present, or future possible game-changing technology for the electric utility sector and broader energy industry? Depending on whom you ask, it might be all three.

Blockchain offers transformative potential for making, managing, and monitoring secure transactions across modern energy systems. A number of companies are making significant investments in understanding and testing its value.

Details about those investments emerged when the Electric Power Research Institute, with support from Indigo Advisory, completed a survey of the current state of utility blockchain exploration and adoption in the U.S. and Europe. Three European utilities reported leading live blockchain pilots. U.S. utilities are focused on research and internal investigation, with half of the U.S. respondents reporting they are developing proofs-of-concepts or pilot projects.

A common opinion among respondents is that much more lies ahead, that the technology might need to mature before real-world applications stand on their own. Of the 15 utilities and one regional transmission operator surveyed, 70% believe the blockchain market in the utility industry is still emerging. And an overwhelming number of respondents identified the lack of appropriate level of standards for blockchain in the energy industry as a major barrier to investment.

Contrast those views with other recent reports. In 2018, the Gartner Hype Cycle for Emerging Technologies positioned blockchain in a “wary” position -- exiting the “Peak of Inflated Expectations” (or “hype” period) and slowly declining into the “Trough of Disillusionment.”

Blockchain is not included in the recently released 2019 “Hype Cycle” report. The authors stated that “although blockchain remains an important technology trend,” it was removed after three years to include other emerging and innovative technologies that use blockchain technology as the foundation.

Taken together, the power industry responses to the EPRI survey (detailed in a recent white paper and accompanying infographic) and Gartner’s assessment indicate that while blockchain is mature in some ways, it still has a lot of growing to do. Even as they acknowledge barriers to adoption remain, utilities are “cautiously optimistic” that blockchain can provide value.

By conducting internal research, developing proofs-of-concepts, and engaging in pilots, utilities and the industry can begin to more fully realize the potential and value of blockchain. That process can be enhanced and accelerated by industry collaboration through engagement in blockchain consortia such as EPRI’s Utility Blockchain Interest Group (UBIG). Convened by EPRI in 2018, UBIG provides a collaborative forum for accelerating industry learning—especially on high-value applications, beyond transactive energy—by bringing together utility representatives and domain experts from around the world to exchange information and develop best practices.

Through UBIG and similar forums, the path forward for blockchain in the industry may become more clear as applications are tested and the potential value becomes clearer.