Power to the People, How Blockchain Could Democratize Renewable Energy

Decentralization is a pervasive term nowadays. Decentralizing the production and consumption of online content. Decentralizing financial transactions through disruptive technologies such as blockchain and cryptocurrencies (if you are not fully acquainted with the fundamentals of this technology, here you can find an in-depth explanation). Indeed, this technology could foster the production of green power at an individual scale. How? Well, just keep on reading.

There are countries like the USA or Australia where special green energy consumption certificates are issued—the Renewable Energy Certificates (REC). In this way, companies like Apple can prove that their energy consumption is 100% green. Of course, the electrons provided by combined cycle power plants are the same as those coming from photovoltaic cells. Hence, to ensure that an electricity utility has generated a certain amount of renewable energy and that the consumer has purchased it, expensive and sophisticated audits are required, hindering the small-scale production and sale of this type of energy.

This is where blockchain, a technology based on the creation of blocks of information with a unique signature, becomes an ideal ally to generate the renewable energy certificates at a very low cost. Even small producers would thus be able to sell electricity with their own renewable energy certification process, to the extent permitted by law.  This is the reasoning behind companies like Power Ledger (Australia), which provides tamper-proof meters attached to solar panels. This system also allows to measure the generation of electricity on a real-time basis. Unfortunately, current blockchain technology only supports a few hundred certificates or trades, both called transactions, proving that the electricity has been sold and purchased by the specific parties. Of course, using it within a large-scale operation with millions of simultaneous transactions would be unfeasible

This is where Canopus, a new protocol able to manage millions of transactions, comes into play. Developed by a group of researchers at the University of Waterloo (Canada), Canopus takes into account the location of the closest servers instead of relaying data to the cloud. In the long run, because of the high-level security provided by the blockchain technology and its fully decentralized nature, it would be technically possible to create a global renewable energy certificates market. The decreasing costs of solar and wind power combined with systems such as Canopus could prove to be a step further in the transition towards a different energy model, with a greater role for individual citizens.  

Blockchain, beyond cryptocurrencies

As can be seen from the above, the blockchain technology goes well beyond a bunch of speculation-driven cryptocurrencies. The business model of companies like Power Ledger is just one of the many applications currently being developed.

Electric vehicles (EVs) are another area ripe for a transition in the energy model. Recently, BMW announced their road map for 15%-25% of its vehicles to operate on electricity by 2025. This is another unstoppable revolution where blockchain will possibly have its own say.

In the field of electric cars, charging stations are still scarce and billing and payment procedures complex and inconsistent. But, let’s imagine for a moment that any charging station, whether private or commercial, were to be available for any vehicle. Something akin to an EV AirBNB. That’s the approach of e-MotorWerks, a startup from California currently testing a P2P electricity market where individual transactions are backed by a blockchain certification system. Each client that wishes to join the network can sign up and offer his or her charging point to other drivers willing to pay a fee. The system is currently in beta stage but does open some interesting possibilities within this field.     

Also within the transport and logistics sector, although on a considerably larger scale, the global freight traffic could soon be using blockchain to track goods once they leave a factory all the way to their delivery at the customer’s home. This is the goal of Ship Chain, a startup looking to shake up the logistics industry.

BHP, the largest mining company in the world, is also exploring the use of blockchain technology to manage its supply chain. Their system, based on the Ethereum cryptocurrency, Will require geologists, vendors and transport companies to use blockchain encryption to register each stage of the process. The technology will also make use of the InterPlanetary System (IPFS), a peer-to-peer (P2P) protocol.   

Source: The Conversation, Coin Desk