Guest article: Blockchain FOMO in the German energy sector

The Deutsche Energie-Agentur (German Energy Agency) and the ESMT European School of Management of Technology published a survey done with executives in the German energy sector on the theme "blockchain in the energiewende". The results showed an interesting combination of pretty much held-back analyzed conclusions, and surprisingly bigger blockchain activities within the surveyed.

(FOMO? read more)

 

Blockchain? We need such a thing too!

 

Out of the 70 who were surveyed amongst the executives circle in the German energy sector, 69% have heard of blockchain. 52% have planned blockchain activities or even already implemented them (more information at the Blockchain-Tag 2017 event). Assuming you can only carry out activities if you have heard of the technology, then the conditional probability of being active in the blockchain area is 75%.  To note: “analysis and observation” or “participation and training” are also considered activities in the survey. A detailed breakdown would have perhaps given the survey better validity.

 

In the assessment of the future potential of blockchain technology in the energy sector, 81% of the respondents said that “a further prevalence is likely” or that the blockchain will be “a game changer for the energy sector” – this number indicates that there is a larger audience who think in this manner than the percentage who have even heard of blockchain! A significant indicator for the “Fear of missing out” (FOMO). (Note: the authors of the study point out that not all those surveyed answered all the questions).

 

Despite this image of a highly active industry, the dena/ESMT study is, in one way, a counter pole to the study made by the Consumer Center NRW (Verbrauchzentrale NRW)which was published in summer and which reported on the blog from August. Even though this first German language study on energy and the blockchain might have played a major role in the German debate and thus contributed to the knowledge amongst those surveyed, the conclusions of the dena/ESMT survey strongly contrast that of the Consumer Center NRW.

 

For example the summary of the dena/ESMT survey states that the “cost reduction potential of blockchain applications is rather limited for energy users” and that the recommendations show that “the possible contribution of the blockchain to the success of the energiewende 2.0 and towards the transformation of the global energy supply structures, based on today’s findings, should not be exaggerated”. It is unclear how these conclusions have been derived from the survey results.

 

Process optimization vs. platform use

 

The dena/ESMT study illustrates, with the structuring of the survey answers, a central dichotomy in the usage of blockchain solution. Just as how I explained in my blog post in August, that there are two fundamentally different innovations enabled by the blockchain technology: disruptive innovation and process innovation.

 

The dena/ESMT survey speaks of platform and process applications and states: “when asked about the future application areas of blockchain technology, about half of the respondents fall into the segment under public and private trading platforms, in particular peer-to-peer trading and decentralized energy generation whereas the other half see the potential use under the theme “process optimization can be summarized”.

 

What do the pioneers of the energiewende think about blockchain?

 

“Peer-to-peer trade” and “trading platform” has been picked 43 times by those surveyed as possible applications. Thus, the disruptive business models are the focus of the German industry. What’s interesting is the fact, that, the beneficiaries of such solutions are barely to be found in the survey. The group “alternative producers according to the EEG” only made up 8% of those surveyed. Decentralized solutions in the regional framework however offer great potential for blockchain applications. The survey also recognizes this potential: “Blockchain can become a predominant design in islands, e.g. in commercial parks or autonomous energy communities”.

 

What do the owners and operators of the approximately 1.5 million solar plants, 9,000 biogas plants (falsely labelled biomass power plants in the dena/ESMT publication) and the 26,000 wind energy plants think of the technology (those who were mentioned but not surveyed)? What is the position of the 100% renewable energy regions, the bioenergy villages and the participants in the solar league on the potential of the blockchain technology? That would be interesting to find out. Just as they were the pioneers of the energiewende, they can also take part in this digital journey that is happening. There is great potential here, and it has yet to be measured.

 

If you are interested to know more on this theme: Discuss with the experts live at the Solarpraxis Neue Energiewelt’s Blockchain Tag 2017 on the 27 January 2017 in Berlin.

 

We thank Kirsten Hasberg, economist, energy  expert of BlockchainHub Berlin and lecturer at the IT-University of Copenhagen for this guest blog contribution.