Blockchain, also known as distributed ledgers, is one of the rising technologies that are witnessing considerable interest from various industries, energy supply companies, technology startups, governments, and academic institutions, among others. Blockchains are shared and disseminated data structures that securely save a digital transaction without the need for a central point of authority. This emerging technology has the potential to bring a paradigm shift in the way conventional industries and technologies work, making them more secure and efficient. Blockchain guarantees a transparent, secure, and tamper-proof solution for smart contracts in the energy sector. Increasing peer to peer (P2P) energy trading, electric vehicle mobility, increasing renewable energy production, and carbon credits trading, among others, drives the market growth.
The energy sectors are witnessing rapid changes in recent years, owing to the increasing demand for renewable energy projects. Surging volumes of embedded renewable energy generation, owing to the increased investments from private players and government agencies, provide an impetus to market growth.
As per the International Renewable Energy Agency (IRNEA), the renewable energy sector is expected to grow in the coming years, and the solar PV cell installed capacity is expected to reach around 877 GW by 2024. With the increasing number of renewable energy source production, the complexity of the energy distribution can be made easy with the use of blockchain. Blockchain is finding extensive interest in various applications related to the energy sector, such as metering/billing, the security of grid, cryptocurrency payments, green certificates, carbon trading, decentralized energy trading, assets management, and e-mobility, among others.
Surging diversification of the energy sector is nudging the key players to adopt the latest technologies, such as artificial intelligence and blockchain technology. Blockchain technology is extensively used in the energy sector as it helps in reducing the operational costs, increases the lean profit margins, and also reduces the number of intermediaries that saves costs. All these factors are projected to propel the market growth.
As the cost of solar energy continues to decline, the demand for renewable energy is witnessing a significant surge in demand globally. Increasing consumer awareness about climate change and ill effects on our plant, in the long run, has spurred the shift toward renewable technologies that emit less to non-carbon in the atmosphere. This has led to a shift from a fossil fuel-based electricity grid to a sustainable renewable energy grid. According to the Solar Energy Industries Association, the residential solar energy segment witnessed 7 percent growth from the year 2017 to 2018, and around 315,600 households installed solar energy systems in the year 2018.
The introduction of the 'net metering' concept, which is the transfer of the incentives that homeowners receive from the government/ private electricity manufacturers for producing excessive electricity with solar systems installed at their homes and rooftops, has surged the adoption of solar systems. Blockchain technologies are gaining importance in the energy sector, especially for the net metering concept, where it records an accurate account of the energy produced and sent to the grid since it is linked to the smart meters. This ensures that the residential producer gets the exact remuneration for the electricity produced without the need for an intermediary, which erodes the profits received.
Furthermore, the blockchain technology makes it possible to receive payments in cryptocurrencies and also make payments with it. Furthermore, it increases transparency in the payments and security of transactions. The interconnectedness of the blockchain technology with energy meters can also help in identifying a problem in the electricity lines that need repair; hence, reducing downtimes.
Asia-pacific is one of the biggest regions in the world in terms of geography and population. The region is home to China and India that are the top two countries in terms of purchasing power parity (PPP). There has been a considerable increase in energy demand in the region. The growing number of industries and manufacturing bases on account of the inflows of foreign direct investments, increasing demand for manufactured goods, surging disposable incomes, and rising population drives the regional market growth. As per the International Energy Association (IEA), between 2019 and 2040, the demand for energy consumption in India is expected to double.
Countries such as India and China have taken proactive steps to align their national projects and plans in line with the objectives of the Paris Treaty that aims to mitigate the effects of carbon emission and prevent the rise of global temperatures. There has been resurgent growth in countries such as India and China to increase the penetration of renewable energy sources and reduce dependency on fossil fuels. India has set targets to meet the Sustainable Development Goals (SDG) and plans to reach the installed capacity of solar energy of 175 GW by the year 2022.
Increasing demand for electric cars has significantly surged the need for charging stations, further unlocking umpteen opportunities for the adoption of blockchain technologies in the energy market in the region. Blockchain aids in reducing the costs provides environmental sustainability and increases transparency for stakeholders. It also helps in tracking energy use and avoid any duplication and transaction costs by eliminating the need for intermediaries. However, the recent coronavirus pandemic has created a disruption in the supply chain and the overall demand, which will lead to delaying of the adoption of new technologies by consumers and also lead to the delay of rolling out new technologies by key manufacturers.
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends|