Thursday 28 Mar 2024
By
main news image

This article first appeared in The Edge Financial Daily on September 21, 2018

KUALA LUMPUR: Global consulting firm Accenture said it is looking at how blockchain technology can be applied to the utilities industry, especially as the energy sector is expected to shift from the traditional centralised distribution of energy to a more distributed format, blurring the lines between consumers and producers of energy.

Accenture Digital (Asean) managing director James Chong said the group is exploring ways blockchain technology can be used to incentivise producers and consumers in a distributed environment to reduce the load on grids, provide equitable power supply and costs, as well as incentivise buyers and sellers to produce in the most efficient and clean manner.

During his presentation on “Digital — Powering Innovation in Next Generation Utilities to Achieve Value and Growth” at the 22nd Conference of Electric Power Supply Industry yesterday, he said blockchain has fundamentally changed the utilities industry in three distinct areas.

Firstly, the distributed ledger technology has allowed for greater tracking and tracing ability, which provides visibility, accountability and manageability of a supply chain.

Secondly, he said blockchain can help in a landscape where utility companies are starting to be federated, either due to the liberalisation of the sector or reorganisation, which could give rise to the usage of smart contracts to ensure the fulfilment of responsibilities among the federated players.

“The third, and what I think is the most exciting possibility with blockchain, is the ability to create new products, given that a lot has been said on how utilities companies can diversify their revenue stream.

“Imagine the ability for blockchain to be used to derive new energy products and services, the way the financial industry has used derivatives to produce new products in the financial services industry,” he said.

As an example, he highlighted that there are about US$6 trillion (RM24.84 trillion) worth of currencies circulating around the world, and yet there are some US$60 trillion worth of derivative products related to currencies.

Derivative products can create a multiplier effect for the energy sector, Chong said, leveraging on blockchain technology.

“Blockchain, as you know, is an immutable distributed ledger that allows many parties to contribute, view and change information in a controlled manner or in a distributed fashion.

“If I have generated clean energy at, let’s say 10kWh, I would have a distributed ledger entry of that block of energy, which can be traded, sold or used by the consumer in very interesting ways. I can incentivise different parties to consume the energy that I have generated,” he said.

“For example, the producer could set different rates between rural and industrial consumers or incentivise the usage of electricity during non-peak hours by setting a cheaper rate at certain hours of the day, in order to reduce the load on the grid.

“Blockchain allows us to do all this in a distributed manner and can give rise to many kinds of products and services,” Chong added.

      Print
      Text Size
      Share