Energy is a sector pretty late to the digital disruption game — that is, it is yet to be disrupted to the same extent of other industries.

So what are the factors that are going to be driving the digitalisation of energy?

1, Grid parity of renewable energy

In many key markets energy has reached an inflection point where renewable energy will have become the cheapest form of new power generation by 2020.

This will, in turn, lead to a proliferation of virtual power plants.

If you are unfamiliar with the concept think “Airbnb/Uber for energy generation“.

Companies will provide platform services without owning any power plants but connecting service providers (energy generators) with customers (consumers of energy).

2. Global investment in digitalisation

Investment in digital electricity infrastructure and software grew over 20% annually between 2014 and 2016, overtaking global investment in gas-fired power generation.

Think about what that means — the value is increased in the control and management of energy, not the generation assets.

Controlling supply-led, distributed, intermittent generation requires a smart algorithmic grid.

3. Energy will be increasingly distributed and peer-to-peer (P2P)

Renewables are low density & intermittent, making the energy system more ‘supply-led’.

This requires local energy balancing (yet more software) to avoid major infrastructure upgrades

4. An energy transaction layer built on the blockchain

Decentralised energy production is prime for blockchain based transactions.

This requires a very low-cost transaction layer to support energy exchanges at the grid edge.

This is where transactions built on the blockchain will really shine — eradicating the high costs of the big energy companies at present.

David Brown runs MishaAnalytica.com a consultancy using Artificial Intelligence and data science to solve some of the biggest problems facing the planet.

Further reading

‘Peer-to-peer energy trading on blockchains’ — David Shipworth https://www.youtube.com/watch?v=AcufQeaOK1U

PwC (2016). Blockchain — an opportunity for energy producers and consumers?, PWC Global Power & Utilities: 46.