A recent report indicates the use of blockchain technology in the energy sector is continuing to grow. According to the report, the global market for this use of blockchain technology is anticipated to grow at a CAGR of 52.9% during the forecast period 2018-2026. One of the big drivers of this growth is that some of the biggest technology companies are investing in making this technology available for the energy sector. The payers include: Accenture, Oracle Corporation, Microsoft Corporation, Deloitte, IBM Corportaion, Grid+, NOdalblock, SAP SE, Power Ledger Pty. Ltd. and Amazon Web Services, Inc., to name a few.
Sheppard Mullin’s blockchain team and energy group have been covering this topic for some time. We also believe that there will be significant growth in this space. Some of our prior posts on this include Considering Blockchain In The Electricity Industry (2018) and Blockchain Continues to Make Headway in the Energy Industry (2019). In these posts, we discussed how blockchain technology and smart contracts have the potential to become major disrupters in the energy industry, and accelerate the automation in the electricity delivery transaction chain and allow for more decentralized, efficient electricity markets. We also indicated how these technologies may allow end users (such as homeowners) to play a more active role in the electricity markets beyond simply relying on their local utility company to supply their electricity demand.
However, as we noted, as these technologies advance and become more widespread (1) users of such technologies must be cognizant of the various regulatory requirements that could apply to them, (2) state and federal regulators need to update regulatory practices that are obsolete or impede the use of these technologies in the electricity industry and (3) traditional incumbent utilities should consider ways in which they can leverage these technologies.
This recent report confirms that the anticipated growth of blockchain technology in the energy sector is happening. It also provides an indication of how the global blockchain technology in the energy sector market is sub-segmented into the following areas:
- Energy Trading
- Grid Management
- Supply Chain Management
- Payment Schemes
It also indicates that the end-user segment of the global blockchain technology in the energy sector market is sub-segmented into:
- Oil and Gas
We will continue to provide periodic updates on the growth of blockchain in the energy sector and legal issues associated with this.