IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v13y2020i22p5869-d442872.html
   My bibliography  Save this article

How Can Blockchain Technology Accelerate Energy Efficiency Interventions? A Use Case Comparison

Author

Listed:
  • Marco Schletz

    (UNEP DTU Partnership, Department of Technology, Management and Economics, Technical University of Denmark, Copenhagen Ø, 2100 Copenhagen, Denmark)

  • Ana Cardoso

    (UNEP DTU Partnership, Department of Technology, Management and Economics, Technical University of Denmark, Copenhagen Ø, 2100 Copenhagen, Denmark)

  • Gabriela Prata Dias

    (UNEP DTU Partnership, Department of Technology, Management and Economics, Technical University of Denmark, Copenhagen Ø, 2100 Copenhagen, Denmark)

  • Søren Salomo

    (Technology and Innovation Management, Technical University Berlin, 10623 Berlin, Germany
    Center for Entrepreneurship, Technical University of Denmark, DTU, 2400 Kgs. Lyngby, Denmark)

Abstract

This paper qualitatively evaluates the application of blockchain technology for three energy efficiency use cases. To achieve the Sustainable Development Agenda, energy efficiency improvements have to double by 2030. However, the adoption of energy efficiency interventions is slow due to several market barriers. Blockchain technology is a nascent technology with the potential to address these barriers or even fundamentally change energy system designs, by enabling transparent, decentralised, and tamper-resilient systems. Nevertheless, a blockchain application comes with trade-offs and needs to be considered on a case by case basis. In this paper, we examine the benefits and constraints of a blockchain application for three different approaches to achieving energy efficiency: (i) peer-to-peer (P2P) energy trading; (ii) White Certificate Scheme (WCS); and (iii) Energy Service Companies (ESCOs). For each of these cases, we apply a decision framework to assess blockchain feasibility and outline a potential blockchain-based design. The analysis shows that blockchain functions are case dependent and that an application creates different governance and system designs due to varying case characteristics. We discuss how the identified blockchain adoption barriers can be overcome and stress the need for policy action to advance the development of pilot studies. By decentralising system governance, blockchain enables innovative designs that can accelerate the implementation of energy efficiency interventions.

Suggested Citation

  • 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.
    • Handle: RePEc:gam:jeners:v:13:y:2020:i:22:p:5869-:d:442872
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/13/22/5869/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/13/22/5869/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Friederike Rühmann & Sai Aashirvad Konda & Paul Horrocks & Nina Taka, 2020. "Can blockchain technology reduce the cost of remittances?," OECD Development Co-operation Working Papers 73, OECD Publishing.
    2. McConnell, Dylan & Hearps, Patrick & Eales, Dominic & Sandiford, Mike & Dunn, Rebecca & Wright, Matthew & Bateman, Lachlan, 2013. "Retrospective modeling of the merit-order effect on wholesale electricity prices from distributed photovoltaic generation in the Australian National Electricity Market," Energy Policy, Elsevier, vol. 58(C), pages 17-27.
    3. Jakob Skovgaard & Sofía Sacks Ferrari & Åsa Knaggård, 2019. "Mapping and clustering the adoption of carbon pricing policies: what polities price carbon and why?," Climate Policy, Taylor & Francis Journals, vol. 19(9), pages 1173-1185, October.
    4. Peter Howson, 2019. "Tackling climate change with blockchain," Nature Climate Change, Nature, vol. 9(9), pages 644-645, September.
    5. 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.
    6. Lin-Yun Huang & Jian-Feng Cai & Tien-Chen Lee & Min-Hang Weng, 2020. "A Study on the Development Trends of the Energy System with Blockchain Technology Using Patent Analysis," Sustainability, MDPI, vol. 12(5), pages 1-19, March.
    7. Mr. Dong He & Mr. Ross B Leckow & Mr. V. Haksar & Mr. Tommaso Mancini-Griffoli & Nigel Jenkinson & Ms. Mikari Kashima & Mr. Tanai Khiaonarong & Ms. Celine Rochon & Hervé Tourpe, 2017. "Fintech and Financial Services: Initial Considerations," IMF Staff Discussion Notes 2017/005, International Monetary Fund.
    8. Linh Pham, 2016. "Is it risky to go green? A volatility analysis of the green bond market," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 6(4), pages 263-291, October.
    9. Schleicher-Tappeser, Ruggero, 2012. "How renewables will change electricity markets in the next five years," Energy Policy, Elsevier, vol. 48(C), pages 64-75.
    10. Lin William Cong & Zhiguo He, 2019. "Blockchain Disruption and Smart Contracts," The Review of Financial Studies, Society for Financial Studies, vol. 32(5), pages 1754-1797.
    11. Benedikt Notheisen & Jacob Benjamin Cholewa & Arun Prasad Shanmugam, 2017. "Trading Real-World Assets on Blockchain," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 59(6), pages 425-440, December.
    12. Marco Schletz & Laura A. Franke & Søren Salomo, 2020. "Blockchain Application for the Paris Agreement Carbon Market Mechanism—A Decision Framework and Architecture," Sustainability, MDPI, vol. 12(12), pages 1-17, June.
    13. Dong He & Ross B Leckow & Vikram Haksar & Tommaso Mancini Griffoli & Nigel Jenkinson & Mikari Kashima & Tanai Khiaonarong & Celine Rochon & Hervé Tourpe, 2017. "Fintech and Financial Services; Initial Considerations," IMF Staff Discussion Notes 17/05, International Monetary Fund.
    14. Stede, Jan, 2017. "Bridging the industrial energy efficiency gap – Assessing the evidence from the Italian white certificate scheme," Energy Policy, Elsevier, vol. 104(C), pages 112-123.
    15. Thomas Morstyn & Niall Farrell & Sarah J. Darby & Malcolm D. McCulloch, 2018. "Using peer-to-peer energy-trading platforms to incentivize prosumers to form federated power plants," Nature Energy, Nature, vol. 3(2), pages 94-101, February.
    16. Jiani Wu & Nguyen Khoi Tran, 2018. "Application of Blockchain Technology in Sustainable Energy Systems: An Overview," Sustainability, MDPI, vol. 10(9), pages 1-22, August.
    17. Zhang, Chenghua & Wu, Jianzhong & Zhou, Yue & Cheng, Meng & Long, Chao, 2018. "Peer-to-Peer energy trading in a Microgrid," Applied Energy, Elsevier, vol. 220(C), pages 1-12.
    18. Shengmin Tan & Xu Wang & Chuanwen Jiang, 2019. "Privacy-Preserving Energy Scheduling for ESCOs Based on Energy Blockchain Network," Energies, MDPI, vol. 12(8), pages 1-16, April.
    19. Diestelmeier, Lea, 2019. "Changing power: Shifting the role of electricity consumers with blockchain technology – Policy implications for EU electricity law," Energy Policy, Elsevier, vol. 128(C), pages 189-196.
    20. Lee Won Park & Sanghoon Lee & Hangbae Chang, 2018. "A Sustainable Home Energy Prosumer-Chain Methodology with Energy Tags over the Blockchain," Sustainability, MDPI, vol. 10(3), pages 1-18, March.
    21. Yinghui Chen & Xiaolin Gong & Chien-Chi Chu & Yang Cao, 2018. "Access to the Internet and Access to Finance: Theory and Evidence," Sustainability, MDPI, vol. 10(7), pages 1-38, July.
    22. Asma Khatoon & Piyush Verma & Jo Southernwood & Beth Massey & Peter Corcoran, 2019. "Blockchain in Energy Efficiency: Potential Applications and Benefits," Energies, MDPI, vol. 12(17), pages 1-14, August.
    23. 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.
    24. Zheng Che & Yu Wang & Juanjuan Zhao & Yan Qiang & Yue Ma & Jihua Liu, 2019. "A Distributed Energy Trading Authentication Mechanism Based on a Consortium Blockchain," Energies, MDPI, vol. 12(15), pages 1-21, July.
    25. Juhar Abdella & Khaled Shuaib, 2018. "Peer to Peer Distributed Energy Trading in Smart Grids: A Survey," Energies, MDPI, vol. 11(6), pages 1-22, June.
    26. Di Silvestre, Maria Luisa & Gallo, Pierluigi & Guerrero, Josep M. & Musca, Rossano & Riva Sanseverino, Eleonora & Sciumè, Giuseppe & Vásquez, Juan C. & Zizzo, Gaetano, 2020. "Blockchain for power systems: Current trends and future applications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 119(C).
    27. Marten Risius & Kai Spohrer, 2017. "A Blockchain Research Framework," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 59(6), pages 385-409, December.
    28. Jayanth Rama Varma, 2019. "Blockchain in Finance," Vikalpa: The Journal for Decision Makers, , vol. 44(1), pages 1-11, March.
    29. Andoni, Merlinda & Robu, Valentin & Flynn, David & Abram, Simone & Geach, Dale & Jenkins, David & McCallum, Peter & Peacock, Andrew, 2019. "Blockchain technology in the energy sector: A systematic review of challenges and opportunities," Renewable and Sustainable Energy Reviews, Elsevier, vol. 100(C), pages 143-174.
    30. Jose P. Martins & Joao C. Ferreira & Vitor Monteiro & Jose A. Afonso & Joao L. Afonso, 2019. "IoT and Blockchain Paradigms for EV Charging System," Energies, MDPI, vol. 12(15), pages 1-25, August.
    31. Sioshansi, Fereidoon P., 2006. "Electricity Market Reform: What Have We Learned? What Have We Gained?," The Electricity Journal, Elsevier, vol. 19(9), pages 70-83, November.
    32. Bertoldi, Paolo & Boza-Kiss, Benigna, 2017. "Analysis of barriers and drivers for the development of the ESCO markets in Europe," Energy Policy, Elsevier, vol. 107(C), pages 345-355.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Oliver Wagner & Kurt Berlo & Christian Herr & Michael Companie, 2021. "Success Factors for the Foundation of Municipal Utilities in Germany," Energies, MDPI, vol. 14(4), pages 1-15, February.
    2. Aleksandra Kuzior & Mariya Sira & Paulina Brozek, 2022. "Using Blockchain and Artificial Intelligence in Energy Management as a Tool to Achieve Energy Efficiency," Virtual Economics, The London Academy of Science and Business, vol. 5(3), pages 69-90, November.
    3. Robert Karaszewski & Paweł Modrzyński & Joanna Modrzyńska, 2021. "The Use of Blockchain Technology in Public Sector Entities Management: An Example of Security and Energy Efficiency in Cloud Computing Data Processing," Energies, MDPI, vol. 14(7), pages 1-19, March.
    4. Muzammil Hussain & Waheed Javed & Owais Hakeem & Abdullah Yousafzai & Alisha Younas & Mazhar Javed Awan & Haitham Nobanee & Azlan Mohd Zain, 2021. "Blockchain-Based IoT Devices in Supply Chain Management: A Systematic Literature Review," Sustainability, MDPI, vol. 13(24), pages 1-23, December.
    5. Liu, Jicheng & Sun, Jiakang & Yuan, Hanying & Su, Yihan & Feng, Shuxian & Lu, Chaoran, 2022. "Behavior analysis of photovoltaic-storage-use value chain game evolution in blockchain environment," Energy, Elsevier, vol. 260(C).
    6. Jan Kalbantner & Konstantinos Markantonakis & Darren Hurley-Smith & Raja Naeem Akram & Benjamin Semal, 2021. "P2PEdge: A Decentralised, Scalable P2P Architecture for Energy Trading in Real-Time," Energies, MDPI, vol. 14(3), pages 1-25, January.
    7. Agnieszka Izabela Baruk, 2021. "Relationships between Final Purchasers and Offerors in the Context of Their Perception by Final Purchasers," Energies, MDPI, vol. 14(11), pages 1-15, June.
    8. Yuan Liang & Casey Watters & Michał K. Lemański, 2022. "Responsible Management in the Hotel Industry: An Integrative Review and Future Research Directions," Sustainability, MDPI, vol. 14(24), pages 1-18, December.
    9. Urom, Christian, 2023. "Time–frequency dependence and connectedness between financial technology and green assets," International Economics, Elsevier, vol. 175(C), pages 139-157.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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).
    2. Marco Schletz & Laura A. Franke & Søren Salomo, 2020. "Blockchain Application for the Paris Agreement Carbon Market Mechanism—A Decision Framework and Architecture," Sustainability, MDPI, vol. 12(12), pages 1-17, June.
    3. Azim, M. Imran & Tushar, Wayes & Saha, Tapan K. & Yuen, Chau & Smith, David, 2022. "Peer-to-peer kilowatt and negawatt trading: A review of challenges and recent advances in distribution networks," Renewable and Sustainable Energy Reviews, Elsevier, vol. 169(C).
    4. Meritxell Domènech Monfort & César De Jesús & Natapon Wanapinit & Niklas Hartmann, 2022. "A Review of Peer-to-Peer Energy Trading with Standard Terminology Proposal and a Techno-Economic Characterisation Matrix," Energies, MDPI, vol. 15(23), pages 1-29, November.
    5. Ante, L. & Steinmetz, F. & Fiedler, I., 2021. "Blockchain and energy: A bibliometric analysis and review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 137(C).
    6. Yahia Baashar & Gamal Alkawsi & Ammar Ahmed Alkahtani & Wahidah Hashim & Rina Azlin Razali & Sieh Kiong Tiong, 2021. "Toward Blockchain Technology in the Energy Environment," Sustainability, MDPI, vol. 13(16), pages 1-20, August.
    7. Dorfleitner, Gregor & Muck, Franziska & Scheckenbach, Isabel, 2021. "Blockchain applications for climate protection: A global empirical investigation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 149(C).
    8. Capper, Timothy & Gorbatcheva, Anna & Mustafa, Mustafa A. & Bahloul, Mohamed & Schwidtal, Jan Marc & Chitchyan, Ruzanna & Andoni, Merlinda & Robu, Valentin & Montakhabi, Mehdi & Scott, Ian J. & Franci, 2022. "Peer-to-peer, community self-consumption, and transactive energy: A systematic literature review of local energy market models," Renewable and Sustainable Energy Reviews, Elsevier, vol. 162(C).
    9. Siripha Junlakarn & Phimsupha Kokchang & Kulyos Audomvongseree, 2022. "Drivers and Challenges of Peer-to-Peer Energy Trading Development in Thailand," Energies, MDPI, vol. 15(3), pages 1-25, February.
    10. Zhou, Yue & Wu, Jianzhong & Song, Guanyu & Long, Chao, 2020. "Framework design and optimal bidding strategy for ancillary service provision from a peer-to-peer energy trading community," Applied Energy, Elsevier, vol. 278(C).
    11. Schwidtal, J.M. & Piccini, P. & Troncia, M. & Chitchyan, R. & Montakhabi, M. & Francis, C. & Gorbatcheva, A. & Capper, T. & Mustafa, M.A. & Andoni, M. & Robu, V. & Bahloul, M. & Scott, I.J. & Mbavarir, 2023. "Emerging business models in local energy markets: A systematic review of peer-to-peer, community self-consumption, and transactive energy models," Renewable and Sustainable Energy Reviews, Elsevier, vol. 179(C).
    12. Oskar Juszczyk & Khuram Shahzad, 2022. "Blockchain Technology for Renewable Energy: Principles, Applications and Prospects," Energies, MDPI, vol. 15(13), pages 1-24, June.
    13. Nan Jiang & Qi Han & Guohua Zhu, 2023. "A Three-Dimensional Analytical Framework: Textual Analysis and Comparison of Chinese and US Energy Blockchain Policies," Sustainability, MDPI, vol. 15(6), pages 1-28, March.
    14. Roth, Tamara & Utz, Manuel & Baumgarte, Felix & Rieger, Alexander & Sedlmeir, Johannes & Strüker, Jens, 2022. "Electricity powered by blockchain: A review with a European perspective," Applied Energy, Elsevier, vol. 325(C).
    15. Jagdish Prasad Nepal & Nuttaya Yuangyai & Saroj Gyawali & Chumpol Yuangyai, 2022. "Blockchain-Based Smart Renewable Energy: Review of Operational and Transactional Challenges," Energies, MDPI, vol. 15(13), pages 1-21, July.
    16. Tushar, Wayes & Yuen, Chau & Saha, Tapan K. & Morstyn, Thomas & Chapman, Archie C. & Alam, M. Jan E. & Hanif, Sarmad & Poor, H. Vincent, 2021. "Peer-to-peer energy systems for connected communities: A review of recent advances and emerging challenges," Applied Energy, Elsevier, vol. 282(PA).
    17. 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.
    18. Ableitner, Liliane & Tiefenbeck, Verena & Meeuw, Arne & Wörner, Anselma & Fleisch, Elgar & Wortmann, Felix, 2020. "User behavior in a real-world peer-to-peer electricity market," Applied Energy, Elsevier, vol. 270(C).
    19. Kobashi, Takuro & Yoshida, Takahiro & Yamagata, Yoshiki & Naito, Katsuhiko & Pfenninger, Stefan & Say, Kelvin & Takeda, Yasuhiro & Ahl, Amanda & Yarime, Masaru & Hara, Keishiro, 2020. "On the potential of “Photovoltaics + Electric vehicles” for deep decarbonization of Kyoto’s power systems: Techno-economic-social considerations," Applied Energy, Elsevier, vol. 275(C).
    20. Nazir Ullah & Waleed S. Alnumay & Waleed Mugahed Al-Rahmi & Ahmed Ibrahim Alzahrani & Hosam Al-Samarraie, 2020. "Modeling Cost Saving and Innovativeness for Blockchain Technology Adoption by Energy Management," Energies, MDPI, vol. 13(18), pages 1-22, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:13:y:2020:i:22:p:5869-:d:442872. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.