On August 9, the Congressional Research Service released a report that discussed both the advantages and disadvantages of developing blockchain solutions in the energy sector. The report was entitled, "Bitcoin, Blockchain, and the Energy Sector."
Among the advantages the report cited was the fact that blockchain-based solutions would allow customers to purchase energy within the context of a distributed ledger system. This, in turn, would make such solutions more transparent for consumers as well as more flexible and more efficient. As a disadvantage, the report claims that such solutions would have various potential issues. These issues include cybersecurity and distribution control.
In the report, the researchers also cited a study that was conducted by the Electric Power Research Institute as a reason for not implementing blockchain-based solutions in the energy sector. The survey indicated that the vast majority of people in the industry do not believe that current standards are sufficient for creating such solutions.
In spite of this, a number of U.S. utilities are reportedly researching the possibility of developing blockchain-based solutions. Some utilities are even developing pilot programs. Meanwhile in Europe, there are reports that indicate that a number of utilities have been using blockchain-solutions for some time now.
One of the problems with developing such solutions in the United States is that the enforcement of energy laws in the country is split between federal and state regulatory agencies. While a federal agency regulates wholesale electric transactions, state agencies regulate retail transactions. So, it is unclear at the moment whether energy transactions issued on a distributed layer would be under the jurisdiction of federal or state regulators.
But all this has not curtailed interest in blockchain technology within the energy sector. Recently, the U.S. Department of Energy awarded grants of more than $1 million to four entities, for the pursuit of developing blockchain-based energy transaction systems. The four include:
ComEd The University of Denver Virginia Tech BEM Controls
Dr. Amin Khodaei, who works at the University of Denver, said that now is the time to investigate such solutions.