Can Blockchain Energy Solutions Revolutionize African Energy Industry

Can Blockchain Energy Solutions Revolutionize The Energy Industry In Africa?

Blockchain Energy SolutionsBlockchain energy solutions have ushered in a consumer-driven energy sector, which a few years ago is completely a mirage. In today’s world, Blockchain technology is opening an entirely new energy chapter that is powered by smart technologies. Africa is undoubtedly a hive of activity from the cosmopolitan hub of Cape Town to the cultural centre of Cairo. Even with the great attractions and vibrant activities, the continent remains without sufficient access to electricity. The purpose of this article is to ascertain Blockchain energy solutions that can help revamp the energy industry in Africa. 

Also related: The application of Blockchain in the energy sector

Today, there are many Blockchain use cases in Africa, but our focus will be on Blockchain energy solutions and the prospects it holds for Africa. It is a fact that the demand for electricity in Africa largely exceeds that of supply. As a result, the economic growth of the region has also been on the downward slope. For instance, Nigeria, with a current population of about 200 million, has a shortage of approximately 173, 000MW. This has led to the large-scale importation of noisy and polluting generating sets. 

In most of the sub-Saharan African Countries, the experience is the same as that of Nigeria. In the rural areas of Rwanda, where more than 70% of the nation’s population reside, less than 30% have access to electricity. In fact, a great number of households and public buildings are not even connected to their state-backed power grid. Although the government of Rwanda has set 2024 as the target for successful electrification, only time will tell how successful it will be. Well, judging by what their government led by President Kagame is doing at the moment, there is a higher chance that they will achieve their target.

The Outlook Of The Energy Industry In Africa

The current energy industry in Africa is heavily dependent on biomass and kerosene to meet daily energy requirements. The accessibility of electricity and natural gas is mostly restricted to those living in urban settlements. Rural electrification rates across sub-Saharan Africa are very low as it is reported that more than 600 million people lack access to basic electricity requirements. 

In Africa, inadequate infrastructure remains a core challenge for the African power utilities, especially in sub-Sahara Africa. Development in power generation and transmission capabilities have been unable to keep pace with the growing demand. The major reason for this is the lack of investment and creditworthiness of power utilities to maintain existing operations and invest in upgrading infrastructure. 

There are lots of inefficiencies in the value chain, as utilities do not realize the true value of generated power. The cost of electricity is becoming expensive, and utilities are working on integrating resources and policies that provide consumers with better-priced electricity. There has been the exploration of wind, solar, geothermal reserves, and natural gas to reduce the demand-supply deficit through investment in the contemporary generation technologies. Grid defection is a very big challenge as much as they need to incorporate renewable generation at a central and distributed level. The energy industry in Africa is becoming more customer-centric as more business models are implemented to address customer needs. 

In Africa, the adoption of technologies and best practices has been very slow. However, the African continent has an enormous opportunity to adopt the latest technologies, such as Blockchain technology.

Blockchain Energy Solutions

Many thought leaders in the energy industry agree that Blockchain has the potential to transform energy commodities flow from source to customer. Through collaborations and partnerships, leading multinational oil, gas, and utility companies and Blockchain innovators are creating a new frontier for energy. When you consider the total dollar and economic impact, there are very few industries that surpass the global energy market. The global value of the energy market is currently placed at $5 trillion annually. 

Over the years, the energy sector has been consistently powered by innovations such as rooftop solar, electric vehicles, and smart metering. It is surprising that of the many use cases of Blockchain, energy and sustainability is often less recognized. A joint report released by the World Economic Forum, Stanford Woods Institute for the Environment and PwC show Blockchain use cases across industries. The report identified more than 65 emerging Blockchain uses cases for the environment. Some of the identified use cases of Blockchain include a new business model for energy markets, real-time data management, etc. 

Blockchain technology has the potential to improve the efficiencies for utility providers by tracking the chain of custody for grid materials. Aside from providing provenance tracking services, Blockchain technology offers unique solutions for renewable energy distribution. Enterprise Blockchain solutions stand to benefit legacy energy sectors like oil and gas. The complex network of participants in the petroleum market suffers from multiple process insufficiencies. Many of the large scale oil and gas companies are seeking to invest in and implement Blockchain technology solutions. This is a result of the tech’s ability to reduce costs and lower harmful environmental impacts.  

With these oil companies always concerned about their trade secrets, private Blockchain networks provide data permissioning and selective consortium access to pre-approved parties. 

How Blockchain Energy Solutions Can Revitalize the African Energy Industry 

There are many ways that Blockchain technology in Africa can be utilized to transform the energy industry. Blockchain adoption in Africa can be tailored to address the various energy lapses in the industry. 

  •       Wholesale electricity distribution

By applying the Blockchain energy solution to wholesale electricity distribution, there will be a better chance of connecting end-users with the grid. When you combine Blockchain technology with the Internet of Things (IoT) allows consumers to trade and purchase energy directly from the grid rather than from retailers. Blockchain energy companies like Grid+ are focusing on wholesale energy distribution. According to Grid+, retailers are the driving force of inefficiency in the consumer electricity market. These retailers own very little part of the grid infrastructure. They only manage the kinds of services that Blockchain technology can seamlessly replace. Such services include billing, metering, usage, etc. Ethereum is able to connect users directly to the grid, thereby allowing users to buy energy from the grid at a cost they desire. By supplementing retailers with Blockchain-based platforms, energy consumer bills can be reduced by at least 40%. This will give rise to a more equitable and stable energy market in Africa with lower electricity costs. 

  •       Peer-to-Peer energy trading 

A Wood Makenzie Blockchain in Energy Report showed that 59% of Blockchain energy solutions are building peer-to-peer energy markets. With a peer-to-peer energy market, can trade and buy excess energy from other participants. The approach benefits the masses because it reduces the control of central authorities like wholesale entities. For instance, Power Ledger, a Blockchain Company in Australia, has connected communities to one another to create “microgrids.” Microgrid Blockchain adoption in Africa will help create a more robust energy industry in Africa that benefits the masses. 

Read: How Blockchain Technology is Changing the World’s Economy

  •       Better data management 

Blockchain energy solutions can transform the energy industry in Africa by providing consumers with greater efficiency over their energy sources. Blockchain provides an immutable, secure, and real-time updates of energy usage data. Different types of energy data include market prices, marginal cost, energy law compliance, and fuel prices. Last year, the Chilean National Energy Commission (CNEC) announced that it had launched a Blockchain project that is focused on energy. According to the report, the commission will make use of the Ethereum Blockchain to record, store, and track energy data. This approach can also be adopted by the States in Africa. 


There are lots of Blockchain energy solutions that can transform the energy industry in Africa. The onus lies on the policymakers, entrepreneurs, and innovators to look the way of Blockchain to reposition the energy industry. There are lots of Blockchain use cases in Africa, but it is high time the energy sector becomes part of the fray. 

I would love to get your take on the topic. Kindly make use of the comment section provided below. 


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