HowBlockchain Will Empower Renewable EnergyBlockchainis a system of computer networks used to store large amounts of data and keeptrack of complex transactions. It is designed to replace our currentclient-server model and give authority back to the owners of every change ortransaction.
There are many organizations now working on research anddevelopment in test centers around the globe, creating partnerships withblockchain developers to capitalize on the innovative potential of thetechnology. The first institution to experiment with this technology was thefinancial industry, hence the bitcoin. Now, green energy is processing theblockchain in order to trade energy in a peer-to-peer system with consumers. For the mostpart, energy is collected in large grid systems whose meters spit out data thatis logged into a spreadsheet. That data is re-entered to create a certificate,then passed to another set of intermediaries who broker the dealing of thecertificates, then the certificates are verified again by another party, etc.etc. Confused yet? Add on a transaction fee for each of these operations andyou have a very complicated and expensive system that is vulnerable to misuseand lack of transparency.
Regulatory hurdles, consumer acceptance, technicalchallenges, and financial intricacies have been longstanding issues in theenergy industry, and ones that can hopefully be simplified or erased byblockchain technology. A blockchainsystem allows energy producers to trade energy in a peer-to-peer organizationwith consumers. Instead of dealing with the complicated grid system, the meterwould write the data directly to a blockchain. This would allow people to tradeenergy with each other, instead of selling electrons back to the grid first.Picture an apartment building with solar panels and storage batteries as amini-grid that can be tracked, recorded, traded, and used, and all of thetransactions are handled by a blockchain.
Power Ledgeris an Australian company that just started and has already raised $26 millionin an initial coin offering. Power Ledger is creating platforms for microgridsin Thailand and India, as well as two in West Australia. There are also somebig-name companies like Shell and IBM conducting trials and microgrid projects.This idea is still in its infancy, but could potentially advance energy andutilities in the same way the internet ignited communications.
As the energymarket opens up, blockchain offers a better way to handle all the challengesinvolved in the $2 trillion dollars a year energy market and direct much-neededfunds to the renewable energy industry. Alsocontributing is the Energy Web Foundation, a non-profit organization that isworking on the privacy issues surrounding the use of blockchain technology forthe energy industry. The company has developed a platform to standardize theapplications of blockchain to help facilitate more efficient transactions. Theyare the network validators who can whitelist specific power plants ormicrogrids, and accelerate the technology on a global scale. Ten major companieshave signed on as affiliates and they plan to begin by trackingrenewable-energy certificates.
Many expertsagree that blockchain technology can ideally to transform modern energy grids.In the future, homes and buildings could be equipped with software thatmechanically sells and buys power to and from the grid in real-time, cuttingout all the transactions in the middle. Right now, this brand of decentralizedenergy makes up approximately 5% of the market and could grow to 25% of themarket by the year 2025. Blockchains offer a viable way to deal with thecomplex relationships between users, retailers, and producers of renewableenergy.