Assessing the Economic and Technological Opportunities for Blockchain Technology in a Modernizing Grid Landscape

GE Ventures charged the Capstone team with analyzing the economic and technological viability of deploying blockchain technology in the energy sector. Blockchain is a digital ledger where transactions are verified and stored in a decentralized manner, which offers the potential of removing costly intermediaries while still enabling users to make safe online transactions at a fraction of their current speed and cost. In the energy sector, blockchain, alongside internet enabled devices transacting autonomously, could facilitate “smart grids,” peer-to-peer energy trading, demand-side management, enhanced billing, or EV charging payment platforms.

The Capstone team considered several options for GE Ventures, including investing in an existing startup and creating a new business within GE. To find potential business cases for blockchain, the team conducted desk research and in-depth interviews with companies and experts from around the world working with blockchain and energy. Using a team-developed criteria to narrow their options, the team landed on the business model -Blockchain as a Service (BaaS) - and its revenue drivers by projecting a pro forma income statement for a software offering using blockchain to improve utility billing and distributed energy resources integration.

Their recommendations were threefold: (1) conduct due diligence on two established blockchain startups with the most potential; (2) consider creating a blockchain company within GE that licenses BaaS to utilities; and (3) learn from a blockchain pilot occurring within another vertical of GE. The team’s analysis of the technology and market provides GE Ventures a structure for position itself in the emerging industry landscape as an investor or new business creator.