When blockchain arrived on the energy scene three years ago, much of the discussion went straight to disruption and disintermediation. Like Uber racing into a new city, rules were meant to be broken, and the newcomer was seen as a catalyst for near-revolutionary change. Blockchain could spell the end of the utility, the thinking went, by enabling the trading of energy directly among local producers and consumers, automatically discovering pricing and settling transactions securely without any toll-takers in the middle. This has proven technically feasible, and pilots have been actively operating in a few cases around the world. Still, progress has been slow and driven almost entirely by startups that either have limited funding or the ability to willfully ignore the range of regulations surrounding electricity markets.

But what if the peer-to-peer use case is little more than a signal for startup exuberance and the need to make ICOs as attractive as possible to crypto investors looking for paradigm changes? Rather than being the catalyst that drives policymakers to write utilities out of existence, the opportunity for blockchain in the electricity system may instead be serving as a critical missing link in an evolution already well underway. With or without blockchain, the grid is changing. But blockchain’s distinguishing features — immutable ledgers, decentralized architectures, and programmability through smart contracts — are compelling for an electricity system with much greater customer-side participation than ever before.

Looking back over the past decade, the hallmarks of grid evolution are fairly clear and point us to a bigger narrative building — one that culminates in what can simply be called the flexible grid. Starting with early efforts toward enabling an “intelligent grid,” utilities deployed the piece parts of digitalization: advanced […]