Blockchain is reaching every corner of the Earth. See how the energy industry is using it to increase renewable energy.
By and far, blockchain as a technology is designed to disrupt the very core of the industry and sector where it is adopted. The general idea behind the blockchain is to decentralize and secure a more mainstream system that is not controlled by any one party or group.
By definition, it’s a public ledger of network-based transactions distributed and decentralized among a variety of nodes and systems. There is no central server or core system. Instead, authentication is handled by the entire network, publicly. This affords a variety of benefits unique to the technology.
For example, overall transaction costs are reduced because you don’t need to pay any third parties or intermediaries. Also, the exchanging of funds and services is wholly secure, as only the amount of the total transaction is visible to everyone in the blockchain. The related data can only be updated by carrying out a transaction on the network.
Many refer to it as a distributed ledger technology, or framework. It’s used heavily in cryptocurrencies and banking, music licensing, gaming, and much more. It’s also not a stretch to predict it will make waves in the medical, retail, and customer service industries, as well as many others. But the disruption capabilities in the energy industry are where we’re looking next.
Blockchain in Energy
The global electricity market is estimated to be worth nearly $2 trillion, yet it’s heavily monopolized by just a handful of corporations and organizations.
Because the major players are all organizations, consumers and end-users are reduced to simply paying inordinate subscription fees to gain access. Renewable energy and more sustainability can change all that. However, corporations are still vying for total control amid its adoption. In some states, utility companies have restricted the sale of energy, which could otherwise be rolled back into the grid. That means any homeowners or consumers that own their own solar and renewable energy sources miss out on a lot of opportunities.
Blockchain is poised to change this, or disrupt it entirely. Imagine the adoption of a centralized energy market where you can buy and sell energy to fellow consumers, without corporations and third parties. It sounds insane and slightly dystopic, but such a thing is possible with blockchain.
If the technology hits big in the market, it could mean the emergence of several systems that will uproot current monopolies. Consider peer-based energy trading markets, variable electricity rates that are dynamically adjusted based on demand and availability, or even the payment with modern cryptocurrencies.
As more micro-grids crop up—many are operating in New York, Sydney, Perth, and other metropolitan areas—we’ll need ways for communities to facilitate the trade of energy. Companies like Electron have appeared and are working to provide the kind of systems necessary to make this happen.
Well over 15 startups—and growing—are currently introducing blockchain-based technologies into the energy sector to uproot the current state of the industry.
A blockchain platform for peer-to-peer trading of energy among rooftop PV owners and interested public-sector or corporate buyers. With a pilot program in Germany, this program offers people more control and transparency over their energy while keeping the value of energy produced closed to home.
This blockchain-based green energy trading platform enables green energy producers to raise capital by issuing tradable energy tokens. The Ethereum-based platform was born in January of 2017 and is looking to launch in April of 2018 in Europe.
This company is changing electricity delivery in deregulated markets by connecting users to energy producers with blockchain. Drift is made up of engineers from giants like Amazon, Google, and Microsoft working towards a platform that will allow the company to granularly match a customer’s environmental preference.
The Switzerland-based blockchain company is investigating using solar energy to benefit energy-demanding innovative tech like artificial intelligence and the IoT. The company plans to do this by developing a decentralized energy grid.
U.K. startup Electron is harnessing blockchain technologies to design more efficient, resilient, and flexible systems for users interested in using its platform to support broader energy trading and grid-balancing solutions. It has since won governmental support in the U.K. to scale its platform
One of Australia’s most well-known blockchain entrants, Power Ledger is leading the peer-to-peer marketplace for renewable energy. The company is rolling out pilot projects for its blockchain platform, built to support a broad range of energy market applications, in Australia and New Zealand.
What Needs to Happen?
Of course, this all begs the question: what needs to happen for such a change or disruption to truly take place? More importantly, how long will it be until the kind of systems discussed here are rolled out and available to everyone?
For starters, the technology itself needs to be hashed out properly to account for these new solutions and systems. As a technology, blockchain is still in its early days, especially in terms of adoption and deployment. There are many startups, companies and groups working toward adapting the technology and deploying it on the open market, but it’s going to take some time. How long remains to be seen.
Energi Mine is just one emerging platform. It encourages users to consume less energy and trade it on the open market using ETK digital tokens. You earn tokens or are rewarded for being more efficient and sustainable, doing things like taking public transportation or cutting down on home power consumption. The tokens can then be redeemed to pay energy bills, charge electric vehicles, or exchanged for regular currencies. It incentivizes the idea of green and sustainable practices, allowing users to earn money for their good deeds.
Unfortunately, the availability of the ETK coin and platform has yet to make its way to the greater public. Support is coming, though, and that’s the promise of this new technology.
Blockchain has incredible potential to disrupt the energy sector, and may do so in many ways. For now, we’ll just have to wait and see what happens in the near future.
Megan Ray Nichols is a freelance STEM writer and the editor of Schooled By Science. Keep in touch by following her on Twitter and subscribing to her blog.