Alina Fedosova An interconnected energy system of the future requires decentralised, democratic and resilient electricity trading. Ever more companies are wishing for blockchain technology to become a core feature of the European electricity market Blockchain technology enables secure trading without a centralised intermediary like an exchange. This makes it attractive not only for cryptocurrency , where it was applied first to bypass banks, but also for large decentralised energy systems with a high share of renewable energy . In other words, it’s attractive for the European energy market of the future based on “ prosumers ”; consumers who produce electricity using own generators. Experts assert that several important trends exist in the European electricity market that make blockchain a desirable choice.

Firstly, there is a shift from a futures market – where consumers buy electricity for future use, in a bid to mitigate the risk of price increase – to a spot market – where electricity is bought to be delivered the next day at the latest. The shift happens as a reaction to sinking electricity prices, driven by low-cost renewable energy: end users aren’t afraid of price rises and want to benefit from increasingly cheaper electricity. Since blockchain processes transactions nearly in real time, it can become a blueprint for spot electricity trading. Next, transaction volumes on the power market are decreasing . The share of the so-called “15-minute contracts” – containing as little as 0.1 MW of electricity to be delivered during particular 15 minutes on the day or the next – is rising . Such small transactions are better suited to the intermittent power generation from renewables . In these conditions blockchain performs better than traditional energy exchanges. Its transaction costs are lower with the absence of payment to traders and various service providers. At the […]