More than buzz: blockchain's $300 million in energy investments

Investors poured $300 million since the start of the third quarter into applications that will let people buy and sell energy with cryptocurrencies, according to GTM Research.

Half that amount came just in January, and there are now 122 companies developing products or services for the energy industry, the Boston-based research company said in a report Monday.

These companies are betting that people will increasingly use Bitcoin and other types of encrypted currencies for everything from selling solar power from rooftop panels to charging electric vehicles, Colleen Metelitsa, a grid edge analyst at GTM, said in a statement Monday. Most of them are designing systems that run on top of a so-called blockchain layer that can use multiple types of digital currencies.

“There’s something alluring about blockchain’s ability to disintermediate the utility,” Metelitsa said.

Most participants in the nascent market are developing tools for peer-to-peer energy transactions. Other types of transactions for blockchain may include trading renewable energy credits or wholesale energy. Providers of fuel cards for fleet vehicles WEX Inc. and FleetCor Technologies Inc. are also exploring blockchain transactions.

Utilities and other backers expect that these technologies may accelerate financial transactions and improve efficiency, but it’s not clear yet that these investments will pay off, she said.

“It is yet to be proven that blockchain can increase efficiency or add value to key utility platform solutions,” Metelitsa said.

© 2018 Bloomberg L.P