The future of blockchain in district heating : An investigation of possible blockchain applications for a Swedish district heating company

Abstract: Blockchain is described as having endless theoretical potential. In reality however, it is hard toestablish how blockchain can be utilized and what opportunities blockchain may create. Theunclear future of blockchain constitutes a challenge for many companies. Many large incumbentsare uncertain of how to implement blockchain technology in their organization and are anxiousabout the consequences of the new technology. The purpose of this exploratory study is to evaluateblockchain applications for a district heating company in Stockholm to understand favorable areas,necessary criteria for successful implementation and how blockchain could enable new businessopportunities in the district heating market. To be able to reach the purpose of the thesis aliterature study and an empirical study were performed. The literature study is in the form of anextensive investigation about the areas of blockchain and district heating. The empirical studyincludes 17 interviews, both internal interviews with employees at Stockholm Exergi and externalinterviews conducted with professionals with knowledge about blockchain, district heating and theenergy sector. Furthermore, two workshops, in collaboration with Stockholm Exergi, wereperformed at the end of the thesis to evaluate and prioritize the developed blockchain applications.This thesis proposes 32 blockchain applications within 10 areas in the district heating industry.The applications are categorized after their potential, in three categories; green for the blockchainapplications that are valuable to investigate further, orange for the applications that potentiallycould be interesting to investigate further, and red for the applications that are not interesting toinvestigate further. Some applications focus on solving inefficiencies within district heating andsome on exploiting the benefits of blockchain. Eight applications are categorized with greenprioritization, and thus presented in more detail. To take into account that blockchain probablywill have a greater impact in the future, a future scenario was developed and used in the situationalanalysis for the applications. Furthermore, a framework was developed with the aim to be a toolfor a district heating company to utilize while considering if a blockchain implementation wouldbe beneficial, and if so, in what way. The framework is focused on district heating companies butcan be utilized by other actors as well.Our recommendation for a district heating company in Stockholm is to wait one or two yearswhile staying updated. Especially important for the companies are to stay updated on whether newblockchain standardizations will emerge in the energy sector. However, if a district heatingcompany want to initialize a blockchain project we advise the companies to start a pilot projectthat does not affect the current business model but has the potential to be scaled. Since theblockchain technology enhances collaboration, it is important to consider which partners shouldbe included and how the application can create value for all involved parties. However, due to theuncertainty of the technology, companies need to be well aware of that assumed created value maynot be reached as expected. Furthermore, district heating companies also need to bear in mindthat other parameters, for example additional technologies, policies or infrastructure systems, maybe necessary to implement in order to create value from a blockchain solution.