Electricity powered by blockchain: A review with a European perspective. (1st November 2022)

• Record Type: Journal Article
• Authors: Roth, Tamara; Utz, Manuel; Baumgarte, Felix; Rieger, Alexander; Sedlmeir, Johannes; Strüker, Jens
• Is Part Of: Applied energy. Volume 325(2022)
• Publication Date: 2022-11-01
• Subjects: Blockchain -- Benefits -- Challenges -- Energy Systems -- Machine Identities -- Systematic Literature Review; Power (Mechanics) -- Periodicals; Energy conservation -- Periodicals; Energy conversion -- Periodicals; 621.042
• DOI: 10.1016/j.apenergy.2022.119799
• Languages: English
• ISSNs: 0306-2619

Abstract

Highlights: Many blockchain projects in Europe's energy systems fail. Technological, legal, and organizational challenges often outweigh benefits. Certificate trading and machine identities are increasingly hyped applications. Blockchain can best leverage its benefits when it takes a backseat. Abstract: Blockchain is no longer just a hype technology, and effective blockchain applications exist in many industries. Yet, few blockchain projects have been successful in Europe's energy systems. To identify the reasons for this slow progress, we reviewed the recent energy literature regarding the use of blockchain, analyzed industry reports, and interviewed experts who have conducted blockchain projects in Europe's energy systems. Our analysis reveals eight common use cases, their expected benefits, and the challenges encountered. We find that the expected benefits are often little more than generic hopes, largely outweighed by technological, organizational, and regulatory challenges. The identified challenges are significant and numerous, especially for peer-to-peer trading and microgrid use cases. The fact that few projects have yet provided robust evidence for profitable use suggests there is still a rocky road ahead. Moreover, many use cases appear to require more than just blockchain technology to succeed. In particular, privacy and scalability requirements often call for systems in which blockchains only take a backseat. This realization may be essential for the future use of blockchain technology in energy systems – in Europe and beyond.