TAGEV

Energy Business and Blockchain #1 Utility System Reform and Uber/Airbnb
From the editor: Industries undergoing major reform tend to see aggressive implementation of new technologies and methods. This series looks at the electric utility/energy industry which, amid system reform, is producing numerous cases of blockchain applications and ICOs. Yasuhiko Ogushi, an expert in this field, will guide us through the topic. This first article gives a bird’s eye view of the changes occurring in the energy industry, while subsequent articles will go deeper into individual themes and case studies. New models emerging amid Around the world, blockchain application to the energy sector is increasing. There are over 80 organizations and consortiums leading development, and over 100 organizations implementing blockchain in the energy sector if companies participating as consortium members are included (writer’s own research; see writer’s blog covering the topic).   I believe this increase in application of blockchain to the energy sector is founded on changes over the past decades. In other words, if not for the changes in the electric utility industry in the last 20 years, experimental blockchain applications would not have penetrated the electric utility/energy industry to this extent.   What are these foundational changes? One is the liberalization of retail and generation as well as the unbundling of generation and transmission. Countries and regions have implemented this in different ways and at different times, but in Japan this is part of its Utility System Reform from 2015 to 2020. Traditionally, power companies have been vertically integrated, with generation, transmission, distribution, and retail carried out within the same organization. Japan was divided into ten regions, each having a vertically-integrated power company with a regional monopoly. However, after liberalization and unbundling, while transmission and distribution remained part of the regulated domain that provides and manages public infrastructure, generation and retail became competitive domains into which diverse businesses…