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The global blockchain in energy utilities market size was USD 127.5 million in 2018 and is projected to reach USD 1,564.0 million by 2026, exhibiting a CAGR of 37.6% during the forecast period.
The utilities sector is trending towards a distributed yet connected future. With this, several digital optimization opportunities are emerging for technologies, including artificial intelligence (AI), internet of things (IoT), and blockchain. In the current blockchain in energy utilities industry scenario, the utilities are ramping up their digital initiatives in order to maintain their competitive edge in the evolving energy landscape.
Blockchain technology supports energy trading across a vast range of commodity markets, such as electric power, crude oil, natural gas, and refined products. Blockchain-powered solutions can be deployed within each business segment, helping to produce, refine, distribute, and retail trade information related to pricing, position management, logistics, and risk reporting. Implementation of blockchain technology will provide opportunities such as real-time transactions balance of supply & demand, and it will enable peer-to-peer energy trading, and connect electric vehicle (EV) charging stations. As a result of these factors, utility organizations’ interest in blockchain technology is rising.
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A promising industry vision for digital business is for utilities to become a supplier of the energy sharing economy platform. Further, for the utilities sector, blockchain is believed to have the potential to reduce costs and organize transactions as well as speed up the transformation towards cleaner energy and greater efficiency as the utilities industry is facing many disruptive changes in the form of market digitization, new energy sources, storage, and efficiency.
“Increased Generation of Renewable Power to Support Sustainable Initiatives is Driving Market Growth”
The deployment of blockchain technology is expected to witness quick growth in the energy as well as the utilities sector owing to the amplified generation of renewable energy to back sustainable initiatives and the attempts made by oil & gas players to boost operational efficiency and security. Many start-ups are getting attracted to blockchain implementation, both at enterprise and consumer levels contributing to the growth of blockchain in energy utilities market. Dropping dependency on fossil fuels coupled with the growing independence of the local grid from outside sources of energy in the long term is expected to boost the blockchain in energy utilities industry demand during the forecast period.
Furthermore, power utilities are capable of optimizing the generation, distribution, and consumption of electricity through blockchain technologies. The introduction of specially designed blockchain solutions for electricity grids and new decentralized producers of renewable energies are regularly producing massive data assisting the energy companies.
“Rising Adoption of Automation in Energy Utilities Will Fuel Demand”
Owing to the escalating automation in energy utilities, organizations are going through infrastructural changes helping them to reduce total cost ownership and convert into blockchain-powered software. Blockchain-powered infrastructure and solutions also help the energy utilities in refining their overall output.
New electricity consumers such as connected houses, electric vehicles as well as new communicating equipment such as smart meters, sensors, and remote-control devices, are also triggering a heavy flow of data for the energy companies to interpret and make informed decisions. Blockchain technologies also offer solutions for power utilities to assist in achieving higher reliability and efficiency while preserving the balance between consumption and production in an ever-changing energy landscape.
“Blockchain-as-a-Service Segment is Expected to Hold the Maximum Market Share During The Forecast Period”
Based on offerings, the global blockchain market has been segmented into vertical solutions and blockchain as a service. The Blockchain-as-a-Service (BaaS) platform is capable of managing all the necessary tasks and activities to keep the infrastructure agile and operational. Moreover, the BaaS segment is anticipated to grow at the highest CAGR during the forecast period. For the utility industry, blockchain technology can offer infrastructure for sophisticated networks that enable transparent records of generated power, consumption of energy, auditable, and automated process.
“The Production Deployment Segment is Estimated to Have Highest Growth Rate With Rising Implementation in Blockchain in Energy Utilities Use Cases”
Based on the deployment, the blockchain market has been segmented into proof of concept, pilot, and production. Enhanced penetration in deploying ‘proof of concept’ solutions by the significant providers of blockchain technology in the developing nations and the growing need for faster and transparent transactions has enabled this segment to hold the largest blockchain in energy utilities market share during the forecast period.
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This provides the benefits of a consolidated, consistent dataset with reduced errors, which is likely to provide new market opportunities. The production segment is estimated to witness the fastest growth in the coming years, replacing the proof of concept deployment. Implementing blockchain to the vast stores of data, utilities can unravel new revenue streams from better-coordinated markets comprising smarter hardware and widespread electrification.
Advanced cybersecurity, coupled with the increasing regulatory focus to implement and improve the current process backed by enhanced government emphasis toward improving energy efficiency, privacy, etc. is expected to boost blockchain in energy utilities market in North America and Europe. In the Europe utility sector, blockchain has the potential to facilitate new methods for managing the ways in which energy is distributed, accounted for, and secured. For instance, microgrids could become more robust with direct peer-to-peer (P2P) interaction among participants and assets.
Asia Pacific Blockchain in Energy Utilities Market Size, 2018 (USD Million)
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Furthermore, the implementation of several programs to increase the speed of the technology deployment would contribute to the growth of the blockchain in energy utilities market in Europe. For instance, a significant market trend observed is that different utilities are offering green purchase programs allowing customers to buy renewable energy and bundled energy credits from particular renewable energy projects.
Asia Pacific is presently being considered as a hotspot for blockchain-energy applications. An increasing number of utilities are doing pilot projects, governments are experimenting with blockchain, and markets are being liberalized. Owing to a huge demand for energy and the growing penetration of renewable resources. Asia Pacific is expected to be a perfect place for blockchain in energy applications. Latin America and the Middle East and Africa are expected to witness healthy growth during the forecast period.
“Market Players are Focused on Designing more Vigorous Business Models for Blockchain Implementation”
The major players are focused on enabling real-time transactions and designing more vigorous business models, augmenting the utilities industry demand. Also, the vendors are actively investing in more research and innovation for developing blockchain solutions for the energy sector owing to the increasing investment by emerging vendors, like LO3 and Electron, among other 100+ startups.
Utilities are showing their interest in technology by investing in blockchain startups. For instance, utilities like Tokyo Electric Power Company, a Japanese utilities company, has invested in the Energy Web Foundation to speed up the commercial deployment of blockchain technology in the energy industry. In 2017, the Japanese utilities also made investments in Electron, UK-based blockchain vendors specializing in the energy sector.
The report provides comprehensive information regarding various insights of the market. Some of them are growth drivers, restraints, competitive landscape, regional analysis, and challenges. The report further offers an analytical depiction of the blockchain in energy utilities market trends and estimations to illustrate the forthcoming investment pockets. The market is quantitatively analyzed from 2019 to 2026 to provide the financial competency of the market. The information gathered in the report has been taken from several primary and secondary sources.
An Infographic Representation of Blockchain in Energy Utilities Market
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Value (USD million)
Fortune Business Insights says that the global blockchain in energy utilities market was valued at USD 127.5 million in 2018 and is it is projected to reach USD 1,564.0 million by 2026 due to the rising deployments of blockchain in business models of utilities sector.
The blockchain in energy utilities is expected to exhibit an exponential growth of 37.6% in the forecast period (2019-2026) due to increasing automation in energy utilities.
The blockchain-as-a-service offering segment and the proof of concept by deployment segment are expected to be among the leading segment in the blockchain in energy utilities market. Further, the production and pilot segments are estimated to witness moderate growth in coming years post successful utilization of proof of concept model.
By offering, the blockchain-as-a-service segment is expected to be the leading segment holding the majority of market share during the forecast period.
The key factors driving the global blockchain in energy utilities market include increased generation of renewable power to support sustainable initiatives as well as increasing automation in energy utilities globally.
The top players in the blockchain in energy utilities market include IBM Corporation, Greeneum, Oracle Corporation, Microsoft Corporation, EnergiMine, Accenture PLC, Infosys Limited, SAP, SELO3 Energy Inc., and The Sun Exchange (Pty) Ltd.
The proof of concept in the deployment type segment is expected to hold the highest market share during 2019-2025. This is mainly due to the surging need for faster and smooth production process while the production segment is likely to exhibit the highest growth rate.
North America held a considerable market share, followed by Europe due to the implementation of several government programs aimed to pace up innovative technology deployment. At present, Asia Pacific is being considered as a hotspot for blockchain-energy applications. An increasing number of utilities based companies are doing pilot projects. Governments are experimenting with blockchain, and core markets are being liberalized.
The current trends observed in the blockchain in energy utilities market include electrification of the underdeveloped markets as well as the advent of peer to peer energy trading, which is considered more economical than traditional procurement methods.
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