trending Market Intelligence /marketintelligence/en/news-insights/trending/oVwHPMqtBKfnYb2FfYi5EA2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

Utilities, power producers carefully experiment with blockchain benefits

Q&A Credit Risk Perspectives Series: COVID-19 Credit Risks and Recovery for Supply Chains

Assessing ESG Profiles And Returns Against The Broader High-Yield Sector

Virgin Media-O2 Tie Up, EC Reversal on Three-O2 to Reboot Consolidation

COVID-Era Private Credit Trends: Liquidity Covenants In, DDTLs Out


Utilities, power producers carefully experiment with blockchain benefits

SNL Image

Real time statistics from Energy Web Foundation's Tobalaba blockchain transaction and authorization network, which includes partners from Shell, Centrica, ENGIE and TEPCO.
Source: Energy Web Foundation

With industries from diamonds to grocers actively implementing blockchain networks, utilities and power suppliers are taking a more measured approach to assess opportunities for distributed ledger technology on the grid.

The delicate two-step between utilities and state regulators, combined with the rise of upstart energy blockchain ventures and larger technology firms on the grid, is manifesting in what some participants at Greentech Media's Blockchain in Energy Forum in New York described as a "Wild West" atmosphere, where curiosity in blockchain's commercial appeal is leapfrogging any initial regulatory blessing. Among the applications commonly envisioned by blockchain enthusiasts are the prospects for real-time virtual aggregation of distributed energy resources, or DERs, and energy storage assets into grid-scale capacity, along with widespread residential peer-to-peer electricity trading markets.

Blockchain, or digital ledger technology, serves as a decentralized digital network allowing participants to authorize and execute transactions in real-time on a permanent financial record.

But a key question for scaling blockchain across the grid revolves around whether the sector moves to adopt public or private networks. The Energy Web Foundation's Tobalaba pilot platform represents an example of how such a public network functions, with participants including Royal Dutch Shell PLC, Statoil ASA, ENGIE SA, Centrica Plc, Exelon Corp., Sempra Energy and Tokyo Electric Power Company Holdings Inc. Alternatively, utilities and energy retailers could simply go it alone: building private networks internally to automate and drive long-term cost efficiencies, rather than transacting on decentralized digital marketplaces.

Seeking applications

Achieving the dual mandate of scale and internal cost cuts, however, depends on the willingness of regulators and grid operators to potentially cede some functional oversight to a decentralized network of third-party authorities, responsible for facilitating, verifying and executing transactions on the grid blockchain, observers say. From a commercial standpoint, neither regulated utilities nor integrated power firms are waiting for the grid-scale "silver bullet." They are experimenting first with internal blockchain projects to reduce costs within their portfolios, rather than any full-fledged commitment to blockchain market trading applications.

"A lot people are coming to this blockchain party with a hammer looking for problems to solve," Paul Breslow, a principal at EDF Group's Innovation Lab, said March 8. "There's a lot of opportunity on the [operating expense] side, thinking about improving data processes, but on the revenue side, that's where the questions remain in terms of identifying the business models."

Among the lowest hanging fruit for blockchain is the origination, tracking and retirement of renewable energy credits used to satisfy state renewable portfolio standards. NRG Energy Inc. is actively exploring opportunities for nesting its REC portfolio and transactions on a blockchain platform, which it says can be paired with various data feeds and smart contracts to ultimately help it minimize transaction costs.

"What the blockchain can potentially do is create one system of record, and through [application programming interfaces] and interoperability, you can build systems off that and automate them, and that is what we're exploring," Alex Anich, NRG's manager of renewable energy market intelligence, said. NRG has an eye on slashing costs from REC brokerage and accounting fees, he added. "There is a lot of value that can be captured and reduced in terms of transactions costs, and that is where this dis-intermediation has an opportunity."

Strategic views

From a strategic standpoint, private blockchains may offer utilities, particularly in competitive markets with retail choice like New York and Illinois, an opportunity to build and offer new products using customer DERs. These products could increase engagement with customer generators within a utility's service territory in a mutually beneficial way, beyond simply crediting the customer for net metered generation.

"We're interested in exploring if we can use blockchain to enable customers to sell their DER into the [distributed system platform], but also to procure power from the DSP on the back-end," National Grid USA Senior Program Manager for New Energy Solutions Rachel Flynn-Kasuba said. "On the finance side, we're exploring whether we can use blockchain to decrease settlement and clearing costs, and give those savings back to the customers as well."

Beyond bundling customer generation, utilities defending against ratepayer defection to competitive retailers may be able to leverage blockchain internally to provide demand response services, as well as customer energy trading.

"Where we see blockchain as being valuable is ... demand response and transactive energy," Kristin Brown, a principal with Commonwealth Edison Co.'s utility of the future group, said, pointing to the utility's involvement with the NextGrid initiative in Illinois. "As a utility in a deregulated area, there are opportunities for us to provide additional services to our customers at value, whether that is energy exchange or engagement in the demand response market that third-parties currently play."