IOTA: Allrounder in the energy transition

The Paris Agreement on Climate Change, which came into force in November 2016, is essentially an agreement for the transformation of the global energy system. A complete transformation of the energy sector, which accounts for much of the global greenhouse gas emissions, is essential to achieve the agreed goals. Almost all the states of the world have committed themselves to the goals. In 2014, around 80% of the world’s primary energy was generated from fossil fuels (oil, coal, gas). In the future, global energy will be provided less on the basis of coal and oil.

Economic Perspective: Use of IOTA in the energy transition

There is also a turnaround in capital, meaning that capital flows are moving away from fossil fuels to regenerative energies. Linked to this is a decentralization of the entire energy landscape. Many of the large power plants will probably have more or less only a backup function in the future. Countless small wind and photovoltaic systems will provide the required power more and more, but they need to work together optimally and share their data with each other. This will make the energy transition the largest IT project of all time and will only be successful in combination with digitization.


Across countries, countless regenerative, mostly decentralized generation plants have to be integrated and controlled into the existing system. In order to reconcile the fluctuating feed-in of photovoltaic and wind power plants with the energy demand, the use of digital technologies is necessary. In addition, a state-of-the-art infrastructure must continue to be created that will enable a real-time energy industry in the future.

But also payment flows must be able to be pushed back and forth quickly and reliably in such a system, with a huge data transfer. In the future, millions of producers and consumers will need to communicate in real time, sharing not only information but also digital values. All of this has to be automated, because for reasons of time and money it is not possible for people to manually execute such transactions. And this is where IOTA comes into play. As an example, the wind turbine, as one machine, must communicate quickly with the power grid, as another machine, and the electricity and grid usage must be paid.

The grid pay for energy independently

IOTA tangle is a real peer-to-peer network — by machines for machines. There are many benefits to this approach: decentralization, scalability and no transaction fees to name but a few.

By enabling transactions to be validated in parallel, IOTA can achieve a much higher throughput — the highest transactions per second of any distributed ledger which scales with the network. This is vitally important because in the „Energy-Systems-World“, there are massive volumes of nano and micro transactions and so near-zero or zero transaction fees are essential for this to economically viable.

Providing wallets for example to machines like photovoltaic systems has radical implications. Today, no traditional bank is a bank account to a photovoltaic system. But with a digital wallet a photovoltaic system can generate income from physical or data services without any middleman and use it for purchases like maintenance. Just as banks use the criteria of “know your customer”, IOTA provides the assurance of “know your machine” through secure identities.

However, with all the huge opportunities and visions it is an urgent task to include the user of things in these big developments and to make them understandable. Only then will the transformation of the energy system and society succeed. What use is it, for example, if the washing machine is running automatically at sufficient sun and wind times, but no laundry is in it. People, as the key factor must be taken in all the great upheavals, then it will work.

First companies in the energy sector rely on IOTA

Kontrol Energy announced on January 31, 2018 that they would like to buy a software company and join the IOTA Cryptocurrency Sector. But for example also the German energy giant Innogy has been busy with IOTA and its applications for a long time. More and More companies see the benefits.

Conclusion: Win-win-possibility: Evolution of IOTA applications in the energy industry

The flexibility of IOTA can make IOTA applications in the power industry the interface of communicating tubes between power generation and power consumption. Thus, these applications can become important interfaces of energy value chains and could contribute to the system stability of this new system.

IOTA can be an ideal partner in achieving the goals of transforming the energy system. Our project “public IOTA” will in future also devote more attention to this area and support applications as well as developers of applications. In any case, we will bring our experience in the energy sector to that project.