Blockchain Pilot Makes Waves in Russia's Energy Sector

Published on by Cointele | Published on

Earlier this week, Russian tech startup Waves announced it has been testing a blockchain solution for payments in the retail electricity sector.

The pilot program was initiated by Rosseti, Russia's national energy grid operator, which is looking to automate and make transactions between energy producers, suppliers and consumers more transparent.

Blockchain and energy: What makes them work together?According to Wood Mackenzie, a global natural resources research and consultancy group, the first documented use case of distributed ledger technology in the energy sector can be traced back to April 2016, when residents of Brooklyn, New York, started trading solar power via a blockchain peer-to-peer system.

The report goes on to say that investments in the blockchain-in-energy industry reached over $300 million between the second quarter of 2017 and the first quarter of 2018.Indeed, these days, the energy sector is widely considered to be one of the most attractive fields for DLT. A 2019 academic study titled "Blockchain Technology in the Energy Sector: A Systematic Review of Challenges and Opportunities" reviews as many as 140 blockchain commercial and research initiatives within the field.

What exactly makes blockchain a good fit for the energy sector? As per a 2018 Deloitte report, adopting blockchain in energy and resources "Could improve visibility, increase operating efficiencies, and streamline regulatory reporting."

More specifically, the paper's authors argue that blockchain could provide a reliable and efficient platform for executing and recording energy trading; store vast amounts of clean, tamper-proof data accessible to regulators; and track efforts of numerous parties involved in the end-to-end process of creating and delivering electricity to consumers.

Russia's energy industry problems - and how blockchain can solve themIn the blog post announcing its blockchain solution, Waves explained that the main drivers for the project are the inefficiency, opacity and mounting debt that currently plague the Russian energy industry.

If implemented correctly, blockchain can indeed help to overcome these hurdles, Eyal Shani, a senior researcher at blockchain-focused research firm Aa?ykesubir, told Cointelegraph.

Waves' solution: A blockchain-assisted app that could go nationwideWaves' solution, which is "Directly integrated into electricity meters," includes a blockchain platform, mobile and web applications, and a gateway for data transmission.

"The blockchain captures data at each stage, makes the process completely transparent and allows to permanently resolve the dispute between the participants on the issue of 'who made the loss and who to pay for them?', while smart contracts make it possible to ensure that all participants fulfill their financial obligations."

x