LCG Energy To Streamline Energy Consumption Through Blockchain Technology
Utility companies have been looking for ways to optimize their supply chain and maximize the effectiveness of their services for a long time. 50 years ago, they started to explore digitization with the belief that with its help, new ways for the reporting and analysis of consumption data will unfold, ultimately leading to higher efficiency and lower prices for both the supplier and the end consumer. And indeed, the contribution of innovation brought to the whole energy sector thanks to digitization was prominent, in some areas such as the petroleum industry more than in others. For utility companies, the digital era introduced multiple innovations to energy reporting, communication to the customer, payments and more. One such innovation is the digital electricity meters known as Smart Meters, which transmit consumption information digitally and thus do not require manual readings by the supplier.
However, despite the technological progress the industry has been making, electricity prices have gone up by a considerable margin over the last 15 years. There are multiple variables affecting the equation – from regulatory pressure on nuclear power plants forcing their closure and the transition towards less economically viable sources of electricity production to social factors affecting the decision of consumers regarding their choice of energy source. At the same time, we ask ourselves what went wrong and how can we get back on track
The term energy contracting was born many years ago somewhere in the beginning of the industrial revolution. Simply explained, energy contracting deals with installing and operating energy technologies in a business environment with the purpose of maximizing the efficiency of all existing and future energy-related processes and thus minimize the operational costs of these businesses. Energy contracting has various types and touches upon both the purely technical and financial parts of the implementation of energy projects.
How can blockchain help with the optimization of energy consumption
The advent of blockchain technology was the cause of many discussions across the whole energy sector. Having seen the application of blockchain and its benefits in the financial industry, stakeholders turned towards the innovative technology with the hope it could provide solutions for the energy industry too. With its immutability of records and ability to introduce a decentralized data infrastructure, blockchain has proven itself to be applicable virtually everywhere where there is any type of data exchange (including monetary transactions) and a need for an increased level of security and efficiency.
But how can blockchain help with the optimization of energy consumption for the end customer exactly? Turns out that the innovative technology goes far beyond the execution of money transactions – according to multiple independent sources, research, as well as many stakeholders in the energy sector, blockchain-enabled smart meters could potentially solve one of the most pressing issues with digitization as a whole – data integrity and security. Cybersecurity threats pose a potential risk to electricity grids that rely on digitized processes – just recently, Russian hackers managed to shut down several central grids in Ukraine due to weaknesses in their data architectures, leaving whole areas without access to electricity. With blockchain and the distribution of information across multiple nodes, there is no central point of failure, which greatly reduces the risk of any type of cyberattacks. In order to be able to manipulate the information, hackers will have to access over 50% of all active nodes in the network distributed across multiple computers.
Recently, a utility provider in Germany found more use cases for blockchain that will potentially change the energy landscape as we know it.
LCG Energy: energy optimization with blockchain
One company that has been engaged in energy contracting and energy optimization for more than a decade recently announced their upcoming blockchain initiative. After 2 years of active research, LCG Energy, a german electricity supplier, energy contractor and trader with operational licenses in Germany and Austria and over 50.000 customers, found out that with the help of blockchain technology, the way of optimizing energy consumption and processes can be brought up to the next level.
Having installed thousands of Smart Meters over the course of the last decade, LCG Energy is proficient in the analysis and optimization of energy consumption for both businesses and households. The company has managed to achieve approximate savings of up to 20% compared to the average market prices on the German market which currently has the highest electricity prices in the world. With blockchain, the company will be the first to take a step towards the complete implementation of the technology across the whole energy sector. Thanks to blockchain, consumption data will not only be more secure against cybersecurity threats – it enables a higher degree of automation when coupled with advanced Artificial Intelligence and Automated Machine Learning technologies, which can potentially lower the cost of the whole cycle related to data reporting and analysis, as well as to increase the efficiency of the optimization techniques that are designed based on the data acquired through Smart Meters.
Consumers that are using Smart Meters deployed by LCG Energy will have full access to their data through a blockchain-based platform known as the LCG Energy platform. The platform will offer its users the option to pay for their electricity bills with the LCG utility token and acquire a wide array of energy-related services and products independent of the user’s location and whether they have any access to the direct services of LCG Energy. What is more, the platform enables the usage of financial services related to the energy sector such as investments in renewable energy projects, with all investment data kept on the blockchain, leading to an unmatched degree of transparency and security.
Unveiling the future of energy
Emerging technologies have proven themselves to exceed the expectations of both their sceptics and supporters. After AI and AML, blockchain is now considered to be the next big thing in the energy sector. With the current scepticism towards the innovative technology and its state of underdevelopment, it is a matter of time before new use cases and practical applications are unfolded by visionaries like LCG Energy.
To find out more about the LCG Energy project, the company behind it and their future plans, head over to https://lcg-group.de/.