- The blockchain in the energy market is set to grow from its current market value of more than $5 billion to over $25 billion by 2024.
Rising security concerns of grids and networks on account of increasing interconnection and digitalisation will drive the blockchain in energy market growth, according to the latest study issued by Global Market Insights. The study has found that the ability to enhance process efficiency and flexibility, as well as lead time reduction have garnered the attention of power industry giants, thereby stimulating the technology demand.
Moreover, increased loads from the influx of electric vehicles, a burgeoning number of smart appliances, along with a growing share of variable distributed generation in the grids will complement the industry outlook.
Enhanced government emphasis toward improving energy efficiency, privacy, interoperability and cybersecurity coupled with the increasing regulatory focus to implement and improve the current process will propel the Europe blockchain in the energy market.
In 2018, the European Commission introduced EU blockchain observatory and forum to encourage the region’s cross border engagement with the technology and its various stakeholders.
In addition, introduction and implementation of various programmes to accelerate the deployment of the technology in the energy sector will fuel the industry growth.
For instance, various utilities are offering green purchase programmes that allow customers to buy bundled energy and renewable energy credits from specific renewable energy projects.
Factors enhancing blockchain growth
Blockchain in the energy market in the private category is set to grow over 45% by 2025. Capability to provide simple governance structures, lower-cost operations and faster transactions are some of the prominent features stimulating the technology growth.
Increasing trend to build smart contract applications coupled with the accessibility to select the participants will enhance the business outlook.
High potential of the technology to bring reliability and efficiency to the value chain of various industries including the power sector will boost the blockchain in energy market size.
In addition, the growing integration of renewable energy sources with the grid on account of achieving government renewable targets will augment the business growth.
Massive convenience provided by the technology in electricity trading coupled with burgeoning investments toward the blockchain technology pilot projects globally will instigate a favourable industry scenario.
Oil & gas blockchain
Oil and gas blockchain in the energy market is set to witness substantial growth on account of fewer cost intermediaries, limited overhead cost and reduced cash cycle times.
Rising focus of various industry giants toward the adoption of technology to streamline trading in the non-digital crude oil industry along with plans to exhibit enhanced security and optimised efficiency in transactions will boost the industry landscape.
For instance, Shell and BP announced the launch of blockchain oil trading platform to automate and digitise various oilfield related services.
Furthermore, the potential to reduce discrepancies in the operations by enhancing accuracy in freight rates, invoice generation and shipment routing will propel the industry growth.
Author: Babalwa Bungane
This article was originally published on ESI Africa and is republished with permission with minor editorial changes.