Home » Blog » The role of blockchain in the future of renewable energy
The role of blockchain in the future of renewable energy
3202 ,03 enuJ

The role of blockchain in the future of renewable energy

The interest in renewable energy sources is growing constantly due to the climate change concerns, traditional energy market instability and other issues. Renewable energy is very variable, innovative and almost unregulated nationally, politically or economically. Moreover, renewable natural energy sources are typically free to use and can not be depleted. As a result, even countries using traditional energy sources are likely to try using renewable energy in the near future, exploiting wind, water, sun, volcanoes, tides and so on.

On the other hand, most renewable energy sources are inherently less reliable, with conversion and storage processes being complex, both making it harder for retailers to get their revenue and indirectly driving the prices of such energy higher.

As a result the renewable energy market is facing a good deal of challenges as any other market does. And blockchain comes up with solutions for some of them. Blockchain can help to reduce costs, enhance efficiency, improve security, automate processes and much more. For example, there is a popular blockchain solution called REC (Renewable Energy Certificate). It is a green energy (or tradable renewable) certificate, working as a proof of the energy being generated from renewable sources, which can be sold on special trading platforms.

Use cases

Blockchain helps to find easier and more efficient ways to combat challenges which plague the  energy sector. They include:

  • Microgrids. The emergence of microgrids owned by small and medium businesses helps to decentralize energy production and erase central authority dependency. If the main grid fails, the micro ones go on accommodating its local energy needs, while if a microgrid fails the main one still provides energy.
  • Smart meters. The device is designed to monitor energy consumption. The blockchain-based technology helps to take away third party intermediation and avoid data manipulation. All the controlling work is done by smart contracts. They also can help with energy rate calculation and energy consumption regulation and provide transparency in charges.
  • Market visibility. The problem is that the renewable energy market is fragmented, and the connections, for example, between the producer and the retailer (or the retailer and the customer) are quite complicated. Blockchain can help with creating a versatile and convenient to use global platform for all participants (sellers, producers, buyers, logistics, etc.). It can also help to minimize the interaction shortage between businesses, professionals and experts.
  • Decentralization. Decentralization is one of the key advantages of blockchain technology. The traditional energy market is almost completely centralized, with the prices, demand and supply and other factors controlled by limited authorities. Blockchain can help to make the renewable energy markets more customer-oriented. All energy-related interaction data (consumption, fees, production, etc.) is recorded on an immutable blockchain ledger and the responsibilities are shared among all network participants. All calculations are performed by smart contracts and the consumption is controlled according to transparent standards.
  • Transparency. Using renewable energy sources is rather new and therefore lacking transparency; the assumptions do not always meet the facts. Although, using blockchain and blockchain-based marketplaces helps to monitor the consumption and its effects on people and environment on a real time. It makes the industry more transparent and also raises individual awareness. Blockchain can help to track activity of each individual involved in the energy sector and provide up to date and accurate authentic data on how these activities affect the society and the climate.
  • Tokenization. Tokenization (for example, of carbon credits awarded under cap&exchange programs, is in order to restrict the quantity of carbon dioxide emissions) can help to motivate people by monetizing the credits, because along with growing transparency in the industry, more people will look for carbon credits. Credits can be gained by purchasing special tokens.
  • Crowdfunding. Setting up a renewable energy plant for more than just your household will likely require initial investment. Sometimes it is impossible to get enough due to limited access to the pool of potential investors and the investors on their part are struggling to find credible projects. Blockchain can help with building connections between the parties. Potential investors can use tokens and monitor their use in real time. Tokens can be transferred through blockchain-based apps, which raises reliability, speed and brings down transaction costs.


Blockchain offers great opportunities to the sector of renewable energy owing to its transparency, security and decentralized nature. Energy companies see the benefits and join in. Blockchain helps to build connections between the main grid and the microgrids to manage demand-supply cycle in an unprejudiced manner. The smart contracts can help to zero down human intermediation by executing particular conditions automatically. Here are some examples of such collaboration.

  • Electron (UK). Uses blockchain technology to improve flexibility and efficiency of the energy market system by providing a peer-to-peer trading platform. Individuals can trade excessive energy there, and monitor energy production. The data transferring enhances the spread of clean and affordable energy, making it faster and more secure.
  • Brooklyn Microgrid (USA). The project relies on blockchain-powered technology, which provides users with power from local renewable energy sources. Individuals who produce ‘home-made’ energy can sell it to their neighbors. The application is cryptographically secure and users are provided with a correct list of transactions, decentralized accounting and smart metering.
  • SolarCoin. SolarCoin Foundation issues a special SolarCoin token to reward the producers of solar power (they receive 1 token per each MWh) and promote the transition to sustainable types of energy. It also helps to raise funds for renewable energy-powered electricity facilities.
  • Innogy (Germany). In collaboration with Swiss bank UBS, Innogy developed a specific payment system (Car eWallet). Electric car owners are provided with e-wallets for their digital tokens, which they can spend later on for different needs. It helps to send stored energy back to the grid to balance the demand.
  • Softengi. Softendgi created the RES data management system to provide energy producers and consumers with the control of their energy sources. This blockchain-based system helps to store, record and track energy data. The transparency helps to avoid risks of intentional corruption or accidental errors.
  • Eloncity. Its architecture allows to remove power companies’ intermediation by offering storage and exchange directly, by means of blockchain. It allows users to create, store, use and sell their own energy without intermediaries, with their marketplace offers bypassing power monopolies. 

We use cookies on our website to improve user experience and analyze website traffic. By clicking “Accept“, you agree to our website's cookie use as described in our Privacy Policy.