New Zealand’s electricity market- regulation, generation, administration, market clearing, transmission, distribution, metering and retail- are structured on centralised generation. Regulations drive business strategy and behaviour with incumbents deepening entrenched interests.
This complex industry is going to struggle with the coming decentralisation of generation and storage. Change will be slow, painfully so. But change will come.
And there will be new companies, technology driven ones, that will rise. They will bring new attitudes, new systems, and new competition.
Within that future, both the blockchain and the Internet of Things (IoT) could play a major role.
The blockchain provides an ideal way to be the record keeper. It also forms the basis for value transfer and automated processes (“smart contracts”).
On the other hand, IoT provides the necessary way for getting and working with real-time data. Whether that’s generation, metering, or providing the way for consumers to adjust their consumption on the demand side, the IoT will be a critical component.
While physical industries like utilities have been largely insulated from the disruptive change that the Internet has enabled in digital industries, that’s the future the IoT is helping to bring. It may not be what incumbents want but is still likely to happen. On the plus side, it’s probably also a step closer to New Zealand’s goal of 90% of electricity generation from renewable sources in the next 10 years.