A new consortium aims to speed up the development of blockchain technology for use in energy applications.

In a December 2015 article, David Schatsky and Craig Muraskin of management consultancy Deloitte warned that blockchain technology "is coming to disrupt your industry" - and it seems that, in relation to energy, they may be right. Taking off from the financial sector, where blockchain is already being used for money transfers, digital currency exchanges, cross-border payments, smart contracts and more, the term has become the latest buzzword for energy players seeking to avoid pitfalls and find new revenue streams in a changing business landscape.

Blockchain technology, which underpins the bitcoin virtual currency, is a secure digital mechanism that enables transactions through peer-to-peer networks. Through a distributed database, or 'ledger' of 'blocks', or timestamped transaction records, a blockchain can operate autonomously and initiate transactions automatically. And, crucially, proponents say its distributed storage feature as well as its security algorithms make it almost unhackable.

For the energy sector, blockchain can allow devices such as electric vehicles, HVAC systems, water heaters, batteries and solar photovoltaic (PV) systems to transact with each other at the distribution edge. It could speed the transition to a low-carbon economy; it could even prove to be the magic bullet that can help integrate ever-growing numbers of decentralized and renewable sources with the grid while keeping costs in check. Among the companies that have noted this potential and are working on energy blockchain pilot projects or preparing to test the technology are heavy hitters like Siemens, Vattenfall, Enel, Fortum, Innogy, TenneT and Austrian utility Wien Energie, as well as a number of startups worldwide.

One pilot project, a collaboration between Siemens and US-based startup LO3 Energy, aims to develop microgrids that allow local energy trading based on blockchain technology. The companies are working on combining Siemens' microgrid control software with LO3's peer-to-peer trading platform, which was proven in a 2016 pilot project in Brooklyn, New York. The pilot showed that the platform could enable local trading between producers and consumers of PV power in three Brooklyn neighbourhoods, as well as balance out local production and consumption.

Australian startup Power Ledger, working with blockchain firm Ledger Assets, ran a similar pilot project in 2016 for 10 households in Perth. Residents of the National Lifestyle Villages housing development could trade, sell or give PV power 'units' to other participating households during the eight-week trial. A second trial is planned to include about 80 households, some with battery energy storage systems, and Power Ledger said the companies aim to conduct further trials aimed at devising business models for peer-to-peer energy trading.

Meanwhile, Austrian startup Grid Singularity is using blockchain technology to develop a decentralized energy exchange platformthat can host applications ranging from validating electricity trades to monitoring grid equipment. The firm says such a platform has the potential to prolong equipment life, improving both large and small power generation system operators' earnings.

And a crowdfunding platform called The Sun Exchange is using blockchain technology to enable people anywhere in the world to buy in to commercial and industrial solar schemes in Africa, such as a 65 kW solar microgrid in Lesotho, South Africa which will provide power for a mountain community. In this business model, the buyer purchases any number of solar cells and then leases them for use in a project somewhere in the world, with the project only going ahead once all the solar cells are sold.

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