What promises do blockchain technologies offer energy providers?

The New Energy Consumer

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Blockchain: A technology game changer …A blockchain is simply an open, distributed database that processes transactions between anonymous contributors, without a central overseer.

Secure

Uses cryptographic algorithms based on

private and public key encryption.

Real-time

Blocks are verified and added in near real

time; reduces arbitrage risk or data-sync

problems.

Robust

Blockchain ledger is replicated on servers

across the globe; no single point

of failure.

Accessible

Open network; anyone can add blocks and

review the entire blockchain from

inception.

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…with the ability to address concerns in privacy and permission management.

• Permission less – anyone can use it

• “Proof“ consensus – “Proof of Work” for Bitcoin

• Public nodes• Cryptocurrency token• Open wallet access/Internet

• Permissioned – defined group can participate

• Custom consensus engine – rules set by participators

• Private nodes – closed group• Optional token• Closed wallet access/virtual

private network

Public blockchain: The Internet

Semi-private and private blockchains:Extranet and Intranet

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But why choose blockchain instead of a traditional database?

Allows disintermediation from third party

trust entities

No central gatekeeper is required to verify transactions and authenticate their source – this is done independently by multiple nodes. Removes transaction fees of intermediaries.

Multiple contributors

can contribute simultaneously

More than one contributor can modify the database at the same time, from any locale. Blockchain validates the transaction and all contributors can see the history of exchanges.

Creates robust redundancy,

no single point of failure

If a node or contributor is compromised, the rest of the network remains secure; single faults will not break the system because of multiple, disperse backups with up-to-date data.

Removes dependency on

intermediaries and promotes trust

among contributors

Each contributor continuously audits the ledger; consensus structure reduces security risks and penalizes those that deviate from norms.

Is blockchain the answer to some of the challenges energy providers face with traditional databases?

Distributed energy resources

Settlementsand payments

Grid operations and load management

Disintermediation

Lower external transactions costs with banks, clearing houses, and legal entities.

Accelerate settlement process with meter-based collections and decentralized billing.

Facilitate self-managing devices and appliances.

Multiple contributors

Manage peer-to-peer energy marketplace using grid as a service model; facilitate micro-transactions.

Develop new value-add offerings for customers.

Reduce manual switching costs to distributed energy resources.

Facilitate cross border transactions between international parties.

Robust redundancy

Ultra resilient system monitoring for grid and infrastructure; expedite outage resolution time.

Divert grid congestion to alternative infrastructure to balance loads automatically.

Share data between parties securely across organizations and international boundaries.

Open yet secure

Transparency across transactions; reduce risk from fraud, identity theft and service tampering.

Enterprise-wide view of all operations, removes inefficiencies from siloed transactions.

Manage collections/debt with pre-payment metering

Yes it could, and in a secure and disruptive way.

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There are promises that blockchain offers today to prepare energy providers for tomorrow...

• Enhanced current offerings

• New revenue streams

• Lower external transaction costs

• Lower internal costs

Manage risk & working

capital

• Reduced risk

• Improved working capital

Lowercosts

Increasedrevenue

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I want my home appliances to self manage events in real time.

I want to trade solar power in my community, with the assurance that my payments and exchanges are secure.

I wish my energy provider resolved outages faster without needing to dispatch the field teams.

…and for the creation of a new customer journey for the energy prosumer.

I want to have access to several energy providers with distributed energy resources, and I would like to alternate without having to switch myself.

I want to rent an electric vehicle for my commute and I’d like to look at new payment methods for this service.

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But blockchain is not perfect and energy providers need to be aware of the limitations to rapid adoption.

No standards have emerged for rates of verification; delay times are inconsistent and introduce uncertainty in the system.

Unclear if integration value with new systems will transfer to customer or the business; value translation is fragmented.

The regulatory landscape tends to assume centralized trust actors. Lack of framework and legal precedents, with global jurisdictions and economies to coordinate.

Sophisticated analysts may learn of the transaction patterns of the players by analyzing the blockchain; public blockchain may not be ideal for certain industries.

Continued maintenance requires scare technical skills; still requires assets and infrastructure to maintain and upgrade.

Platform provision and immature; unsure of the long term viability of the technology and the success of delivery.

Variability in adoption

Capital expenditures

Regulatory constraints

Privacy Ongoing maintenance

Network effect

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No one can predict the future energy consumer ecosystem for certain; however, blockchain is triggering energy providers to rethink the fundamentals of energy market transactions and explore future opportunities. 

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Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions—underpinned by the world’s largest delivery network—Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With approximately 384,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com. 

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Copyright © 2016 Accenture. All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. This document is produced by consultants at Accenture as general guidance. It is not intended to provide specific advice on your circumstances. If you require advice or further details on any matters referred to, please contact your Accenture representative.