Technology is the solution to the problems the energy sector is facing
Hi Crypto Network,
Recently, a well-known company on the German and austrian energy markets announced the launch of their blockchain initiative with its ambitious plans to bring the sector to a whole new level.
LCG Energy is a licensed utility provider, energy reseller and contractor with over a decade of experience, more than 50.000 customers in Europe and a €40 million revenue in 2019 alone. With the company on its way of acquiring renewable energy projects worth €80 and a €200 million forecasted revenue for 2020, we met with the CEO Mr Michael Opitz to find out more about the plans of LCG Energy to become a blockchain pioneer in the energy industry.
Q: Mr Opitz, what has been the role of technology and particularly digitization in the energy sector over the last decades?
M: It is truly fascinating how technology has driven progress in the energy sector. Application of digital technologies in the energy industry date from 1970, almost 50 years ago. Digitization has helped utility companies and the whole petroleum industry to greatly increase their efficiency. Today the whole energy sector is completely reliant on digitized processes and could not function without them.
As every coin, this one also has two sides — digitization is not without its flaws as it makes the user vulnerable to cyberattacks. Particularly in the case of the energy industry, the damage caused by a potential cyberattack against a utility grid could have a massive impact on whole economies. Just recently, a cyberattack performed by russian hackers succeeded in shutting down the power in whole areas in Ukraine, resulting in substantial losses and thousands of people left without access to electricity. However, we strongly believe that the advantages of digitization outweigh the disadvantages — it is up to us to find solutions to the problems that are suppressing it to unfold its full potential.
Q: What are the main problems that the sector is currently facing? How are they to be resolved by technological progress?
M: Considering the level of interrelatedness between the energy industry and the whole industrial sector, as well as the vital part energy plays in our everyday life, it is imperative that we analyse the picture from a broader perspective. First thing that comes to mind are the environmental issues that are specifically caused by global energy consumption — this means we are not counting pollution by plastic waste and other similar activities. Legislations around the world have already imposed strict measures, forcing energy companies to severely cut down their carbon footprint and overall reduce the air, water and soil pollution caused by dubious waste disposal practices, the petroleum industry and many others. This in turn drastically increases the cost across the supply chain of companies in the energy sector — they have to cope with severe fines if they fail to comply with the new regulations, invest more money into research and development of alternative and more sustainable ways of operation and reduce the share of cheap fossil fuels for energy production that have the trade-off between cost and environmental impact.
Q: What about emerging technologies like artificial intelligence, automated machine learning and blockchain technology?
M: The rate of technological progress is exponentially increasing — today, we are witnessing a stunning degree of innovations across multiple industries, some of which seemed like a far-fetched concepts from a sci-fi movie 15 years ago. AI is one of those concepts that has come a long way since its emergence and is already being implemented successfully including many industries such as energy and space exploration. Artificial Intelligence and automated machine learning enable advanced automation methods and can potentially find use cases virtually everywhere, making tasks that are performed by human labour completely automated.
Q: Tell us more about blockchain and its potential use cases in the energy sector. How does your project utilize it?
M: Blockchain and distributed ledgers have been the cause of heated debate — a few years back, shortly after the launch of Bitcoin, people were mostly divided into two camps that were either strongly optimistic or pessimistic towards the technology. Today, there is no denying that the advantages blockchain can bring to the table in terms of security and flexibility are revolutionary.
In the energy sector, blockchain technology could enable decentralized P2P marketplaces for energy trading which offer much more transparency and security compared to traditional financial methods. What is more, the technology will enable micro producers of renewable energy to trade their excessive energy locally, thereby making production of renewable energy more lucrative and incentivizing its adoption. There are projects working on similar solutions already that have delivered promising results.
With our project, we plan to go a step further and explore the potential of blockchain in bringing new solutions for the supply chain of utility companies. Over the last 2 years we have been working on an integration between Smart Meters and blockchain that would enhance their scope of functionalities and increase the efficiency of energy reporting, analysis and optimization. What is more, we plan to create a blockchain-based platform that would provide a scope of financial services for the energy industry such as investments in renewable energy projects and payments with an unmatched level of security. Users will also be able to obtain a wide scope of energy related services through our 1100 suppliers and partners, essentially becoming members of a full-fledged energy ecosystem.
Q: Do you believe that it is a matter of time to witness a widespread use of blockchain in the energy industry?
M: Yes, we at LCG Energy strongly believe in the important role blockchain will play in the energy sector. The technology is already being implemented across multiple industries — corporations like IBM have been researching and developing blockchain solutions for more than 2 years now. Even governments have acknowledged that blockchain can provide a whole new level of transparency and are working on its implementation for voting procedures and data infrastructures.
Based on the proven advantages of blockchain technology, we believe it is merely a matter of time for utility companies to start implementing it for their operations. We plan to become a pioneer in the sector and set the bar for others to follow.
To learn more about the LCG Energy project, the company behind it and their upcoming blockchain initiative, visit https://lcg-energy.com/.
Hopefully, you have enjoyed today’s article. Thanks for reading!
Have a fantastic day!
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