Global Blockchain in Energy Trading Market Research Report: Forecast (2023-2028)

Market Definition

Blockchain in energy trading refers to the application of Blockchain technology in the buying, selling, and distribution of energy resources. It includes a decentralized & transparent ledger to facilitate & automate transactions between energy producers, consumers, and other participants in the Energy Market. By leveraging the key features of Blockchain, such as immutability, transparency, and smart contracts, energy trading processes can be streamlined, intermediaries can be minimized, and new models of peer-to-peer energy exchange could be enabled.

Market Insights & Analysis: Global Blockchain in Energy Trading Market (2023-28):

The Global Blockchain in Energy Trading Market is estimated to grow at a CAGR of around 25.55% during the forecast period, i.e., 2023-28. The transition of global economies towards digitalization & continuously surging energy demand for electricity, fuel, coal, etc., in the varied economic sector is widely influencing the need for real-time evaluation of energy consumption & distribution.

The enhanced ability of blockchain to eliminate the need for intermediaries, streamline trading activities, reduce administrative burdens, and enable instant transaction settlements, is further influencing the adoption of this technology among energy traders to enhance their cost savings. Blockchain enables direct peer-to-peer energy trading, allowing individuals, businesses, and communities to buy & sell energy without the need for intermediaries. This decentralization empowers energy consumers & producers and has fostered a more democratic energy marketplace in recent years.

Moreover, as economies across Asia-Pacific, North America, and Europe are transitioning towards electric mobility with the announcement of various plans to deploy electric vehicles in national transport. The need for power outlets at home, in office parking lots, at shopping malls, and on curbsides is expected to rise. For instance, China wants 1/5 of its 35 million annual vehicle sales to be electric by 2025.

Simultaneously, the country announced that it would electrify all vehicles by 2032. The increasing demand for decentralized energy systems aligns closely with the capabilities of blockchain technology. Moreover, Blockchain's ability to facilitate transparent, secure, and efficient peer-to-peer energy trading addresses the challenges & opportunities presented by decentralized energy generation, leading to market growth in the forthcoming years.

Global Blockchain in Energy Trading Market Driver:

Rapid Growth of Renewable Energy Sources to Escalate the Market – The surging growth of renewable sources across the globe is accelerating the Energy Trading Market. Renewable energy sources, such as solar & wind power, are becoming more affordable & reliable owing to increasing government policies & incentives, technological advancement, financial investment from private & institutional investors, etc. According to the IRENA, in 2022, costs for renewables continued to fall in 2021, electricity from wind fell by around 15%, offshore wind by about 13%, and solar photovoltaics (PV) by 13% compared to 2020. As solar & wind become more prevalent, households & businesses are increasingly becoming prosumers, generating their electricity & sometimes producing excess energy that could be shared with others.

Consequently, blockchain technology could facilitate this energy exchange through decentralized & transparent peer-to-peer (P2P) transactions, creating Local Energy Markets. By enabling real-time matching of energy supply & demand blockchain, energy trading optimizes grid stability & fosters a more resilient & decentralized energy ecosystem.

Smart contracts on the blockchain ensure fair compensation for prosumers & streamline energy transactions without intermediaries. As renewable energy continues to grow, the blockchain energy trading market is poised to expand, bringing about a more sustainable & efficient energy future.

Global Blockchain in Energy Trading Market Opportunity:

Increasing Focus on Environmental Sustainability to Reduce Carbon Emission Reduction – Increasing awareness of climate change & environmental concerns has generated a growing demand for sustainable solutions across the globe. Blockchain's ability to facilitate clean energy trading aligns with this demand, attracting environmentally conscious consumers & businesses.

In addition, companies are increasingly focusing on their carbon footprint & sustainability efforts as part of their Corporate Social Responsibility (CSR) initiatives. Thus, adopting blockchain technology for energy trading aligns with these goals, enhancing brand image & value among customers. The growing need to optimize load balancing during decentralized energy systems blockchain enables more efficient energy distribution.

Surplus energy could be redirected to areas with higher demand, reducing the need for additional carbon-intensive energy generation during peak periods. Hence, the incorporation of blockchain technology into decentralized energy systems offers a pivotal solution for optimizing load balancing & enhancing overall energy efficiency.

Global Blockchain in Energy Trading Market Challenge:

Lack of Awareness & Absence of Structured Infrastructure is Hampering the Market Growth – The power industry has recognized the transformative potential of Blockchain as an emerging market. However, the lack of understanding & awareness about this technology, coupled with the absence of structured infrastructure to support its implementation, has been impeding Blockchain in Energy Trading Market growth.

The transition from traditional to advanced methods is typically a gradual process for consumers, and as a result, companies are still reliant on conventional approaches. Hence, these factors contribute to the slow uptake of the technology in the market, thereby impacting overall growth.

Global Blockchain in Energy Trading Market Trend:

Introduction of Smart Contracts Empowering Energy Transactions in Blockchain Energy Trading – Smart contracts are self-executing contracts in blockchain energy trading, which automatically execute with predefined conditions, including pricing, quantity, and other parameters. It offers transparency in trading & energy transactions by eliminating the need for intermediaries in the entire process. Once the contract is deployed it enables the automation of the entire energy transaction from beginning to end, which helps in reducing errors as well as processing time.

Unlike the traditional energy trading process, involving various paperwork, it operates on Blockchain, thus increasing the participation of all parties & could verify & audit transactions independently. Furthermore, Ethereum is a blockchain platform for developers to deploy smart contracts that are not controlled by a single user, instead, they have been deployed by the network & run as predefined programs. Also, smart contracts help in facilitating the integration of renewable energy with trading by providing data about the authenticity of renewable generation & ensuring the credibility of renewable energy certificates.

Hence, the introduction of smart contracts within energy trading improves the capability of blockchain technology in energy trading as well as encourages the development of new services & business models in the Global Blockchain in Energy Trading Market. As smart contracts can integrate with other emerging technology & global regulatory compliance, it has the potential to reshape the trading process, thus positively impacting the Global Blockchain in Energy Trading Market in the coming years.

Global Blockchain in Energy Trading Market (2023-28): Segmentation Analysis

The Global Blockchain in Energy Trading Market study of MarkNtel Advisors evaluates & highlights the major trends & influencing factors in each segment & includes predictions for the period 2023–28 at the global, regional, and national levels. In accordance to the analysis, the market has been further classified as:

Based on the Application:

• Peer-to-Peer Energy Trading
• Regulation & Compliance Management
• Commodity Trading
• Electricity Data Management
• Grid Management

Peer-to-Peer Energy (P2P) trading is gaining notable momentum across developed economies due to the ability of consumers to buy & sell excess energy within their community. This widely helps in cost-optimization benefits, thus facilitating the growth in disposable income of the small local producers. The P2P Energy Trading Market globally is dominated by the power sector, presently due to the growing awareness among individuals & government support initiatives to enable the trade of decentralized grids of solar power sources dominantly.

In the forecast year, P2P energy trading is anticipated to witness mass adoption among commercial facilities as well as to sustain the excess demand & supply scenario, as the need for electricity continues to rise and the access to national grid is limited.

Based on the End User:

• Power Utilities
• Oil & Gas
• Residential Communities
• Commercial & Industrial

Among them, the Power Utilities have gained significant traction in recent years & with the continued increase in electricity needs, the segment is anticipated to register exponential growth rates in the forecast years. Surging instances of transmission & distribution loss of electricity & frequent grid failures due to excess supply & lower demand or vice-versa are widely raising the need for the usage of blockchain to track consumption patterns & minimize grid loss. According to CHINT Global, over 1-2% of energy is lost during the step-up transformer, around 2-4% of energy is lost in the transmission lines, about 1-2% of energy is lost during the step-down of the transformer, and over 4-6% of energy is lost during the distribution. This makes the supply of power inaccessible to many of the commercial & residential spaces, thus contributing to economic inefficiencies.

The ability of blockchain to efficiently balance energy supply & demand on the grid by enabling real-time energy transactions & peer-to-peer exchange, and reducing strain on the national grid during peak hours, is widely influencing the platform used globally. As a result, governments across the global economies, such as India, Australia, Spain, etc., are widely influencing the adoption of blockchain trading to balance the energy supply & demand.

Furthermore, as global electricity demand rises by 5,900 terawatt?hours (TWh) in the Stated Policies Scenario (STEPS) and over 7,000 TWh in the Announced Pledges Scenario (APS) by 2030, due to its rising consumption in transportation, HVAC industry, etc., the need for decentralized energy grids is expected to rise. This is anticipated to widely influence the revenue growth of the Global Blockchain in the Energy Trading Market from the power segment in the forecast years.

Global Blockchain in Energy Trading Market (2023-28): Regional Projection

Geographically, the Global Blockchain in Energy Trading Market expands across:

• North America
• South America
• Europe
• The Middle East & Africa
• Asia-Pacific

Among the regions globally, Europe is emerging as a significant center for blockchain-based energy trading due to the increasing adoption of advanced technology in various industries and the support from national governments in the region. According to Wipro, 23 major utility companies in Europe, including Enel SpA and RWE AG, have initiated programs to test blockchain technology. These programs enable anonymous peer-to-peer trading without the involvement of third parties.

Companies like Vattenfall AB and Tennet Holding BV are also utilizing blockchain to manage consumer electricity platforms and networks. However, the use of blockchain in oil and gas trading in Europe is still in its early stages. Additionally, European economies are actively promoting cross-border energy trading to diversify their revenue streams by increasing renewable energy generation. For instance:

• In 2021, Spain has recently adopted a National Integrated Plan of Energy and Climate, setting a goal of achieving 42% renewable generation and increasing interconnector capacity from 2.8GW to 10GW by 2030.

This expansion of cross-border energy trading potential is expected to have a positive impact on the overall growth of the blockchain in energy trading market in Europe in the coming years.

Global Blockchain in Energy Trading Industry Recent Development:

• In 2023, Power Ledger in partnership with Vietnam Electricity Central Power Corporation (EVNCPC) announced the launch of Vietnam's first peer-to-peer (P2P) energy trading project.

Gain a Competitive Edge with Our Global Blockchain in Energy Trading Market Report

• Global Blockchain in Energy Trading Market Report by MarkNtel Advisors provides a detailed & thorough analysis of market size, growth rate, competitive landscape, and key players. This comprehensive analysis helps businesses gain a holistic understanding of the market dynamics & make informed decisions.
• This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
• Global Blockchain in Energy Trading Market Report aids in assessing & mitigating risks associated with entering or operating in the market. By understanding market dynamics, regulatory frameworks, and potential challenges, businesses can develop strategies to minimize risks & optimize their operations.