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Blockchain Technology and Electricity Wholesale Markets: Expert Insights on Potentials and Challenges for OTC Trading in Europe

Author

Listed:
  • Carol Inoue Dick

    (TU-Campus EUREF, TU Berlin, Torgauer Str. 12-15, 10829 Berlin, Germany)

  • Aaron Praktiknjo

    (Institute for Future Energy Consumer Needs and Behavior (FCN), RWTH Aachen University, Mathieustr. 10, 52074 Aachen, Germany)

Abstract

In this manuscript, we investigate the adoption of blockchain for over-the-counter (OTC) electricity wholesale trading under the EU regulatory framework. Our analysis of the core legislation reveals six potential issues: (1) data immutability-related error correction, (2) personal data protection and immutability, (3) access to different data layers, (4) obligation and capacity to report, (5) identification of counterparties and (6) conflict of interest. These six issues were used as basis for a survey with experts in this field from industry and academia. The majority of our respondents indicated four major points: (i) reduction of transaction costs is the main expected benefit, (ii) the application of blockchain can be compliant with the current regulatory framework, (iii) a sandbox is the most welcome regulatory approach to reduce legal uncertainty, and (iv) the first use case to be commercially implemented is expected to be a P2P platform, ahead of a use case focused on post-trade processes. We believe that the results presented in this manuscript might serve as guidance for market participants aiming to enable the development of blockchain.

Suggested Citation

  • Carol Inoue Dick & Aaron Praktiknjo, 2019. "Blockchain Technology and Electricity Wholesale Markets: Expert Insights on Potentials and Challenges for OTC Trading in Europe," Energies, MDPI, vol. 12(5), pages 1-25, March.
    • Handle: RePEc:gam:jeners:v:12:y:2019:i:5:p:832-:d:210428
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    References listed on IDEAS

    as
    1. Pilkington Marc, 2016. "Blockchain Technology: Principles and Applications," Post-Print halshs-01231205, HAL.
    2. Aaron Praktiknjo and Georg Erdmann, 2016. "Renewable Electricity and Backup Capacities: An (Un-) Resolvable Problem?," The Energy Journal, International Association for Energy Economics, vol. 0(Bollino-M).
    3. Pollitt, M.G., 2009. "Electricity Liberalisation in the European Union: A Progress Report," Cambridge Working Papers in Economics 0953, Faculty of Economics, University of Cambridge.
    4. Peter Zweifel & Aaron Praktiknjo & Georg Erdmann, 2017. "Energy Economics," Springer Texts in Business and Economics, Springer, number 978-3-662-53022-1, August.
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    Cited by:

    1. Koo-Hyung Chung & Don Hur, 2020. "Towards the Design of P2P Energy Trading Scheme Based on Optimal Energy Scheduling for Prosumers," Energies, MDPI, vol. 13(19), pages 1-15, October.
    2. Lehmann, Nico & Sloot, Daniel & Ardone, Armin & Fichtner, Wolf, 2021. "The limited potential of regional electricity marketing – Results from two discrete choice experiments in Germany," Energy Economics, Elsevier, vol. 100(C).
    3. Kirli, Desen & Couraud, Benoit & Robu, Valentin & Salgado-Bravo, Marcelo & Norbu, Sonam & Andoni, Merlinda & Antonopoulos, Ioannis & Negrete-Pincetic, Matias & Flynn, David & Kiprakis, Aristides, 2022. "Smart contracts in energy systems: A systematic review of fundamental approaches and implementations," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    4. Esmat, Ayman & de Vos, Martijn & Ghiassi-Farrokhfal, Yashar & Palensky, Peter & Epema, Dick, 2021. "A novel decentralized platform for peer-to-peer energy trading market with blockchain technology," Applied Energy, Elsevier, vol. 282(PA).
    5. Matteo Troncia & Marco Galici & Mario Mureddu & Emilio Ghiani & Fabrizio Pilo, 2019. "Distributed Ledger Technologies for Peer-to-Peer Local Markets in Distribution Networks," Energies, MDPI, vol. 12(17), pages 1-19, August.
    6. Marco Schletz & Ana Cardoso & Gabriela Prata Dias & Søren Salomo, 2020. "How Can Blockchain Technology Accelerate Energy Efficiency Interventions? A Use Case Comparison," Energies, MDPI, vol. 13(22), pages 1-23, November.

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