Social System Innovation in the Energy Sector: Blockchain (Reviews and Prospects of ICEF 2017 Concurrent Sessions)

Posted by Kenichiro Yamaguchi October 31, 2017 Research Director, Mitsubishi Research Institute Inc.

Nowadays, hardly a day passes by without hearing some news about blockchain technology or its most famous manifestation, the Bitcoin. Due to its responsiveness, distributed nature, low cost, and proof against fraud, blockchain technology is suited for peer-to-peer transaction. On the other hand, any low-carbon future envisages a substantial introduction of variable renewable energy, which tends to be distributed and small, unstable, and needs storage or demand response to complement. Therefore, it can be said that blockchain technology suits well with the type of information technology which would be required for massive introduction of variable renewable energy.

Against this backdrop, it was no surprise that the session on Social Innovation in the Energy Sector, featuring Blockchain, was well-attended and its discussions lively. The three speakers represented the cutting-edge in the field of applying blockchain to the energy sector. The discussion seemed at times surreal, but it is all real and is likely to develop further. The audience was actively involved in the discussion, at times challenging the speakers.

From the discussion, it became clear that blockchain technology has a lot to offer to realize a sustainable world based on distributed renewable energy. Much needs to be done, however. Blockchain technology needs to improve in order to enable rapid transaction on a massive scale. Common understanding between key stakeholders is required. Government needs to be confident about blockchain-based transaction not eroding its tax base and keeping the economy visible. Network operators need to come on board. All this suggests that cooperation between stakeholders is crucial, and some form of governance is inevitable. The speakers were of the view that there is a limit to governmental control, to foster development of technology which benefits everyone.

It is the feeling of the moderator that we have barely scratched the surface. It is becoming more and more likely that the combination of variable renewable energy, energy storage and demand response will be the main measures to reduce greenhouse gas emissions in the coming decades. In the process, the boundaries of energy consumer and producer become blurred. In such a world of “prosumers”, I have the feeling that blockchain technology would be featured big, and therefore the technology may hold the (public and secret) keys to the net zero-emission world. I sincerely look forward to discussing again on the issue as soon as the next ICEF, since the technology and its application would have developed by leaps and bounds by then.