John Clair Øyaas – Foundations of Blockchain, Cryptocurrencies and Smart Contracts (CDSCV1001E)
Blockchain facilitating decentralized
electricity.
Foundations of Blockchain, Cryptocurrencies and Smart Contracts project 2022
John Clair Øyaas
Copenhagen Business School
MSc Advanced Economics and Finance
January 2022
1
, John Clair Øyaas – Foundations of Blockchain, Cryptocurrencies and Smart Contracts (CDSCV1001E)
1. Introduction
During the COVID pandemic we have seen prices for different commodities surge,
substantiating a dramatic increase in volatility over all assets. The lockdown in combination
with QE has had a rigid effect on many factors in the economy (Probasco, 2021). Workers not
allowed to work has caused shortages in production, placing great strain on supply chains. In
addition, we have seen some of the driest seasons in decades, with water reserves at all-time
low, making energy prices go to all-time high (Black, 2021). The cumulation of these events
have, arguably, had an enormous impact on the electricity market.
In the last year electricity prices have had extreme fluctuations and the importance of reliable
energy prices has shown itself to be critical for a lot of small and medium sized businesses. One
example of this is Scandinavian greenhouse vegetable growers who have had to shut down their
production due to the high electricity prices in 2021 (Tomter, 2021).
The importance and impact of environmental issues are highly relevant. Finding sustainable
solutions for production, transportation and consumption of energy has become of increasing
importance and addressed at meetings such as the G-20 summit. This in combination with
decreasing costs for renewable energy sources, like solar energy, is transitioning the energy
market from a vertical structure into a decentralized structure (Wörner, 2019).
As a result, this report discusses an alternative way of electricity trade, as potentially being the
creation of grids or networks for decentralized renewable energy sources (DRE). Specifically,
this report highlights how such a decentralized grid can work through the blockchain
application, smart contracts, and how the blockchain network can be constructed. In this report
it is assumed that the world will act against unsustainable energy sources and prepare
municipalities and households for a decentralized renewable power grid that will supply all
parts of the community with energy. Based on this assumption, this report aims to provide a
basis for further understanding on how blockchain technology can be structured to substantiate
decentralized energy networks. We have seen a surge in solar panel installations during the
pandemic(Kaupang, 2021). Thereby, it seems possible that a decentralized grid could become
a use case for blockchain and its applications.
2
Blockchain facilitating decentralized
electricity.
Foundations of Blockchain, Cryptocurrencies and Smart Contracts project 2022
John Clair Øyaas
Copenhagen Business School
MSc Advanced Economics and Finance
January 2022
1
, John Clair Øyaas – Foundations of Blockchain, Cryptocurrencies and Smart Contracts (CDSCV1001E)
1. Introduction
During the COVID pandemic we have seen prices for different commodities surge,
substantiating a dramatic increase in volatility over all assets. The lockdown in combination
with QE has had a rigid effect on many factors in the economy (Probasco, 2021). Workers not
allowed to work has caused shortages in production, placing great strain on supply chains. In
addition, we have seen some of the driest seasons in decades, with water reserves at all-time
low, making energy prices go to all-time high (Black, 2021). The cumulation of these events
have, arguably, had an enormous impact on the electricity market.
In the last year electricity prices have had extreme fluctuations and the importance of reliable
energy prices has shown itself to be critical for a lot of small and medium sized businesses. One
example of this is Scandinavian greenhouse vegetable growers who have had to shut down their
production due to the high electricity prices in 2021 (Tomter, 2021).
The importance and impact of environmental issues are highly relevant. Finding sustainable
solutions for production, transportation and consumption of energy has become of increasing
importance and addressed at meetings such as the G-20 summit. This in combination with
decreasing costs for renewable energy sources, like solar energy, is transitioning the energy
market from a vertical structure into a decentralized structure (Wörner, 2019).
As a result, this report discusses an alternative way of electricity trade, as potentially being the
creation of grids or networks for decentralized renewable energy sources (DRE). Specifically,
this report highlights how such a decentralized grid can work through the blockchain
application, smart contracts, and how the blockchain network can be constructed. In this report
it is assumed that the world will act against unsustainable energy sources and prepare
municipalities and households for a decentralized renewable power grid that will supply all
parts of the community with energy. Based on this assumption, this report aims to provide a
basis for further understanding on how blockchain technology can be structured to substantiate
decentralized energy networks. We have seen a surge in solar panel installations during the
pandemic(Kaupang, 2021). Thereby, it seems possible that a decentralized grid could become
a use case for blockchain and its applications.
2
