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When it comes to blockchain, executives are asking us the following key questions:
1. Should we be taking this seriously and what are the benefits?
2. What are the most promising use cases we should be exploring? Where has blockchain been explored and implemented (both locally and globally) and what are the ingredients for success?
3. When should we invest, how do we get started and what are the practical next steps?
A three-part blog series will address these questions and provide honest insights to help executives to understand the real practical applications of blockchain, and key learnings to help make their blockchain projects a success. Although the focus is on the power industry, insights can also be applied to other industries.
Blockchain in the AU power industry
After the boom and bust of crypto-currency markets during 2017 and 2018 and headlines including “92% of blockchain projects have already failed” and “average lifespan of blockchain projects is 1.22 years”, it is understandable Australian enterprises have been largely sceptical of blockchain technology and its value. However, Deloitte’s 2019 global blockchain survey highlights that globally (and in particular Asia Pacific) the sentiment and investment towards blockchain based projects is changing. Of the 1,386 executives surveyed for the report, 86% of respondents expect mainstream blockchain adoption in the near future and 53% of respondents see blockchain as a 'Top 5' priority for their organisations in 2019. As Deloitte Global Chief Technology Officer Bill Briggs puts it, there has recently been an inflection point that has now arrived as companies shift from blockchain tourism to building practical blockchain applications for business. A recent and important example of this being Facebook and 28 other founding members of the Libra Association (a consortia) who will utilise their own version of blockchain technology to build a new global, digital, currency.
In Australia, particularly outside of financial services, many larger, traditional companies are still in tourism mode when investigating the practical applications of blockchain technology. This is mostly the case for traditional, Australian power companies. Although there are some promising power blockchain use cases and exciting Australian based power-tech companies utilising blockchain, including GreenSync’s deX, PowerLedger and WePower, executives of traditional power companies are taking a ‘wait and see’ strategy towards blockchain. This doesn’t mean that power companies are not interested or in some form involved in exploring blockchain applications (EnergyAustralia is a partner of WePower and AGL and Origin have both explored solar energy trading) but rather deciding to wait until the technology is a safer bet and enablers in place before trying to productionise and scale a blockchain solution – the lower risk approach.
It may not be long before the larger players within the Australian power ecosystem become more active in the blockchain space. The Australian Energy Market Operator (AEMO) and Australian Renewables Energy Agency (ARENA) have recently become more bullish about blockchains role for the industry. Tangible successes of blockchain ventures are prompting Australian power executives we speak to, to want to know more.
The Blockchain bottom line for Australian power companies
Our guidance to Australian power organisations, no matter what stage of their journey, is to proceed with cautious optimism. There is broad acceptance blockchain technology will reach mainstream adoption in the next two to four years. There are exciting use cases, start-ups and new revenue generation opportunities that will challenge today’s status quo. There is no better way to understand blockchain and the value it could generate than testing the technology (the reality vs hype) for yourself. Tests must explore a broad set of questions and use cases through short, sharp, proof of concepts that can take different flavours (technical and non-technical) and can be combined with other existing and emerging technologies.
Roger is a Consulting Partner specialising in providing client-side technology advisory solutions. He has extensive global experience working across multiple technologies and industries, is a member of Deloitte’s Global IT Strategy advisory team, and leads the Australian IT/Operational Technology Convergence Practice.
Christopher is a Director within Deloitte's Technology Strategy & Transformation practice and specialises in emerging technologies with a focus on blockchain. Having previously worked in Deloitte's UK Blockchain Lab, Chris has hands on experience advising and delivering blockchain based solutions for Energy, Automotive, Transport and Logistics and Financial Services clients.