Blockchain is revolutionizing almost every other industry. It is basically a database of transactions which is distributed among multiple computers. It is now gradually moving beyond financial services and cryptocurrencies, and is being touted as the next big thing in the energy sector. The blockchain applications are expected to decentralize the energy industry, reduce peer-to-peer transaction costs, and maintain efficiency in records. As the renewable energy is growing, blockchain is expected to provide solutions to handle the increasingly complex and decentralized transactions between users, large- and small-scale producers, retailers and even traders and utilities in a better way. It is expected to have the same effect on the energy markets what the internet had on the communications sector years ago.
Market overview
The global blockchain in energy market which was estimated to be worth USD 394.3 million in 2018 is projected to reach a value of USD 7,110.1 million by 2023, growing at a massive CAGR of 78.32% during the forecast period from 2018-2023.
Based on type, the private segment is expected to hold the largest market share in the coming years, since it is more secure as compared to public blockchain. Based on component, the services segment is expected to lead the market with the largest share over the forecast period, mainly due to a number of companies are collaborating with various blockchain startups for implementing blockchain operations.
Among end-users, the power segment is one of the major end-users of the blockchain in energy market, and is also expected to hold the largest market share over the coming years, since it has the largest number of implemented blockchain in energy projects and R&D investments.
Geographical growth scenario of the market
The blockchain in energy market in Europe held the largest market share in 2017, and is also expected to be the leading market over the forecast period from 2018-2023. This growth can be attributed to the large number of blockchain startups and implemented projects, along with the regulatory support from the government. In addition, countries such as Germany, the UK, and the Netherlands are the key markets for blockchain in energy market, mainly due to the heavy investments by the companies for the adoption of blockchain technologies, thereby driving the growth of the market in this region.
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Factors driving and restraining market growth
The growth of the global blockchain in energy market is being primarily influenced by the following factors:
- Growing popularity of the blockchain technology in the energy sector
- Rising need to manage infrastructure and other business functions through high transaction speeds and immutability
- Low cost of bandwidth and computing
- Growing security concerns worldwide
In addition, increased venture funding and investments in the blockchain technology and innovations across international trade and supply chain management are expected to further offer lucrative growth opportunities for the market in the near future.
On the downside, lack of common set of regulatory standards and issues concerning authenticity of users are the major factors expected to act as deterrents for the growth of this market.
The major players operating in the global blockchain in energy market include Microsoft (US), Accenture (Ireland), IBM (US), Infosys (India), and SAP (Germany) among others.
