IoT, blockchain and the future of the energy sector

The energy sector is changing. Deregulation and innovation have opened the energy market not only to competition between suppliers, but also to business and home owners to invest in their own energy production and storage systems. Distributed assets, like solar panels, heat pumps or even storage batteries have become readily available and are improving every year.

This means users have more choice than ever to meet their energy needs: the result is that more and more assets are being connected to energy grids everywhere. This decentralisation leads to increased operational complexity. Synchrony also becomes a factor to consider and monitor, as storage systems bank energy within the network.

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This all takes place within a market that is moving towards green energy production at a very fast rate. A market that is also challenged by increasing energy demand, aging infrastructure and pressure from regulators and customers to drive down costs, improve services, conserve valuable finite natural resources and reduce carbon emissions.

The shift requires an ever finer balance between centralised and decentralised assets, so they can be combined to create the virtual power systems of the future. That’s why it’s essential for the energy sector to embrace new technologies, including Internet of Things (IoT) and blockchain, to navigate these uncertain times and be ready for the future.

IoT in the energy sector

Gartner estimates that there are over 1.1 billion IoT devices in the world’s utilities grids, and this number is growing rapidly, driven by the demand for renewable and sustainable sources of energy, improved network operations and differentiated customer service. Many households around the world now have heat pumps and solar panels and wind turbines. These are all major contributors to the energy mix, and with new energy storage solutions such as the Tesla batteries, there is a whole new world of opportunities to generate, store and even sell energy between households and the grid.

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This shift has massive benefits for the environment, and is helping energy systems decarbonise and become more efficient. However, as these decentralised assets become integral parts of the grid, the need to identify, monitor and control them also becomes essential. This is crucial to make sure the grid is stable and operators and users are able to make the most effective use of the distributed capacity created.

Grids are hyper-efficient machines that hang in a constant balance. An imbalance can have serious impacts in either wastage or a blackout. New solutions entering the grid must therefore become an integral part of this delicate equilibrium, and the best way to ensure this happens seamlessly, is identifying and connecting them using Internet of Things (IoT). That’s because IoT can make the data about their status always visible across the entire energy ecosystem in a secure way.

Adding blockchain for increased security

We said the best way to make sure all the new devices can connect to the grid is by using IoT. However, IoT also brings a second essential capability, and this is to ensure that these devices can be trusted to be who they say they are.

SIM-centric blockchain technology (SCB) provides an effective way to help order and co-ordinate the increasingly complex world of decentralised energy. When SCB teams up with IoT, blockchain becomes the trusted enabler to authorise and identify every device, simplifying the safe integration of the decentralised energy assets within grids.

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It isn’t very often that people discuss blockchain and IoT together, but the powerful synergy between secure communication and identity management can create an adaptable and secure mechanism for the simple connection of millions of devices.

IoT can lead to a greener and more sustainable future for all and the energy sector is as the forefront of this shift.

Written by Phil Skipper, head of IoT strategy at Vodafone Business IoT

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