Blockchain Market in the Energy Sector - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Blockchain Market in the Energy Sector - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The market was valued at USD 561.21 million in 2020, and it is expected to reach about USD 12274.67 million by 2026, recording a CAGR of 67.23%, over the forecast period (2021 - 2026). The energy sector has certain limitations, including high administration and transmission costs mainly, due to the centralized functioning of the sector. As blockchain addresses these issues and decreases the scope for single point failures and increases transparency across the supply chain, the technology is expected to be a noteworthy digital transformation for the sector.

Key Highlights

• As the blockchain technology helps regions to meet renewable energy targets, improve the reliability and efficiency of grids, and reduce utility capital expenditure on clean energy generation, its adoption is expected to increase over the forecast period.
• As microgrids allow trading electricity within a specified area and other benefits during emergencies, with the main grid (act as backup solutions), vendors in the market could leverage from the increasing use of microgrids. For instance, the pilot project in Europe’s microgrid by OLI Systems, an energy blockchain vendor in Germany.
• With the rising 'Prosumers' across regions (the ones who consume and produce energy), there is a need for regulations regarding the legal framework and licensing. Only by regulations, the state of ‘Prosumers’ would be defined in the energy sector and the use of blockchain for trading with these prosumers would be streamlined.

Key Market TrendsPayments Presently Hold the Largest Share in the Market

• The blockchain ledger is used in different sectors to reduce the transaction costs, increase the efficiency of exchanges, and pinpoint the origins of energy. Cryptocurrency has gained its importance in December 2017 and consumers started exploring it, owing to factors, such as high reliability and security during the transactions.
• Furthermore, the adoption of blockchain technology enabled the integration of payments system with smart grids. This further aided the companies to invest more in the integration of financial services with smart grid technology.
• Moreover, blockchain has made traditional payment methods less effective and is also overcoming the issues of hacking and data breaching. For instance, the RWE’s power utility has tested the blockchain technology to authenticate and manage the billing process for hundreds of autonomous electric-vehicle charging stations in Germany and California.
• The use of blockchain in the energy sector would also minimize the overhead for utilities and lower costs to consumers by facilitating the billing and metering process between the utility and the consumer, instead of involving intermediary retailers and brokers.

Europe is Expected to Hold Major Share

• With blockchain adoption in the energy sector, transactions such as energy trading can be recorded and settled almost instantly, with no need for an intermediary and with little need for reconciliation since all parties are using the same platform. Europeans as early technological adaptors are having significant adoption of blockchain in the energy sector.
• Companies in the region are partnering with other countries or having high investments to develop products related to energy sector using blockchain technology. Recently, the major United Kingdom energy company OVO invested in blockchain firm Electron through its recently launched technology division, Kaluza.
• Moreover, European Union, with the aid of European Parliament Think Tank, is striving for a common definition of energy prosumers and is also attempting to persuade the legislature to encourage investments in self-generation capacity. With such efforts, the prosumers are likely to be established in the energy market, leading to the successful decentralization of the energy sector.

Competitive Landscape

The blockchain market in the energy sector is highly competitive and consists of several major players. In terms of market share, few of the major players currently dominate the market. These major players with prominent shares in the market are focusing on expanding their customer base across foreign countries. These companies are leveraging on strategic collaborative initiatives to increase their market shares and profitability. The companies operating in the market are also acquiring start-ups working on blockchain in the energy technologies to strengthen their product capabilities.

• February 2019- IBM launched a blockchain platform on cloud service in Melbourne. With the establishment of physical infrastructure, customer data may not have to cross borders and may provide security for regulated applications in government and financial services in the country.
• July 2018 - Microsoft Corporation announced the launch of the Enterprise Blockchain partnership, in Taiwan. The company has entered the partnership with Digital China and Hot Cool, in the hope that the three companies can use the blockchain technology to enhance financial, e-commerce, entertainment, and other industries.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

SAP SE (SAP)
Microsoft Corp.
Accenture PLC
IBM Corporation
LO3 Energy Inc.
GREENEUM
Drift Marketplace Inc.
IOTA Foundation
Btl Group Ltd
Power Ledger Pty Ltd
ImpactPPA
Electron (Chaddenwych Services Limited)

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