The Transactive Energy Market Is Evolving as Vendors Commercialize and Specialize

Transactive energy (TE) is the most common use case of energy blockchain projects according to Guidehouse Insights’ Energy Blockchain Project Tracker. This use case appears to be maturing in both number of new projects and new vendors offering TE in the market. 

TE is a power/energy system in which economic- or market-based platforms are used to make decisions involving the generation, distribution, and consumption of power. It allows value to be created and exchanged throughout the Energy Cloud. TE appears in grid-centric and edge-centric forms, and hybrid and combination forms are possible. Grid-centric platforms tend to focus on enabling distributed energy resources and improving reliability; edge-centric platforms focus on maximizing the value of distributed assets. 

The 2018 hype around blockchain spurred many new TE-focused projects (Figure 1). In this hype, blockchain was used to try to solve any problems in the energy grid. 

Figure 1: Cumulative Blockchain-Based TE Projects, World Markets: 2015-2021

(Source: Guidehouse Insights)

Since then, project numbers are beginning to level out with new TE-focused vendors entering the market (Figure 2). In 2021, 19 TE projects launched and only one new TE vendor entered the market. 

Figure 2: Cumulative Blockchain-Based TE Vendor Market Entry (Vendors that Primarily Offer TE), World Markets: 2015-2021

(Source: Guidehouse Insights)

Figures 1 and 2 show the slow leveling of new projects and vendors in the TE market. Beyond project and vendor numbers leveling out, the market appears to be maturing as vendors prove commercialization and work toward closing current technological gaps in the TE value chain. 

Commercialization 

TE projects are becoming more standardized and beginning to reach a commercial scale, some with millions of transactions and assets on the platform. Electron, Energy Web, GreenSync, Opus One, Piclo, and Powerledger have proven scale, and others are looking to reach scale soon, such as Equigy and LO3 Energy. These market leaders do not all use blockchain. However, blockchain will be successful in the TE market as a key platform used to provide transaction services. 

Specialization

TE vendors have focused on tracking and settlement and payment of energy production and consumption. This tracking can occur at multiple levels or parts of the energy distribution system from peer to peer or even up to the wholesale level. Some vendors are beginning to focus on specializing in dispatching. This specialization can close remaining technological gaps in the TE value chain and offer more complete TE marketplaces when partnering with traditional vendors. Vendors that offer dispatch often do not use blockchain, such as GreenSync, Piclo, Kiwi Power, and Opus One.

GreenSync, a leading TE vendor is focusing on offering dispatching capabilities. Dispatching in this context is the direct control of remote energy flows, requiring local smart hardware. Most TE projects to date that work to balance the grid at an end-user level simply send out signals to customers, say on an app, and ask them to use less energy. With true dispatch at device-level control, customers could potentially preset their preferences and the entire process could be automated. 

In the next 5 years, Guidehouse Insights expects to see more scaled TE projects as the market matures and top vendors solidify their places in the market. For more information about other energy blockchain projects and TE, check out Guidehouse Insights’ Energy Blockchain Project Tracker and the general Energy Blockchain page for latest Analyst Insights on topics like supply chain management.