Firstly, in the European electricity market, there is a shift from a futures market. In a futures market, consumers purchase electricity for future use, in an attempt to mitigate the risk of price rises.
The shift is towards a spot market. In a spot market, purchasers buy electricity for next day delivery at the latest.
The shift occurs as a reaction to declining electricity prices, which low-cost renewable energy has triggered. End users no longer fear price increases. Therefore, they want to benefit from electricity prices, which are getting cheaper and cheaper.
Blockchain processes transactions almost in real time. Therefore, it could become a blueprint for spot electricity trading in the European electricity market.
Transaction volumes in the electricity market
Secondly, in the European electricity market, transaction volumes are declining. 15-minute contracts may contain just 0.1 MW of electricity. These tiny contracts are for delivery during specific fifteen-minute windows on the same day or the next. 15-minute contracts are representing a growing proportion of total transactions in the electricity market.
via Market Business News Companies want blockchain technology for Europe’s electricity market
In the US, long term 5-20 year contracts are common in the energy industry. Now everyone wants out of these contracts, because energy from renewables is 50 percent cheaper than nuclear or fossil fuel.
Blockchain can disrupt the 1 percent controlled, top down dirty and toxic fossil fuel and nuclear ‘good ol white boys’ club.