The figure above is an utility bill, similar to what you’d get in Moscow monthly. I’m sure you get similar ones living in NY, Berlin, Melbourne, or anywhere else in the world. In spite of the fact that this piece of paper appears to be unimportant it can teach you three experiences to change your perspective on power industry:
- Firstly, electric power is a scarce commodity good, which is 2-times more expensive to transport to your home to produce (Note that wholesale generation costs 1.44 RUB/kWh are making up less that 1/3 of the final household price 4.65 RUB/kWh). So even if manhood develops an unlimited and a zero costs power generation source (which is unlikely) your utility bill won’t turn out to be substantially less expensive.
- Secondly, in current industry, majority of economic value and income (over 2/3 in this Russian example and up to 90% in other liberalized markets like Germany) sits somewhere outside of competitive wholesale power markets and includes transmission & distribution charges, infrastructure security maintenance and renewable programs, system management costs, and all kinds of middlemen fees. Not awful as such. The only issue is that this huge market segment is not subject of competition, but is tariff regulated or remains “gray” area.
- Thirdly, generic common sense tells that coincidence of large cash flow and missing competition gives a perfect playground for innovations. This bottom-up innovations focus on how the function of power supply may be provided in more cost efficient, secure, and sustainable way to create the phenomena of Grid Edge Economics — novel paradigm is one of the most promising segments of power industry transformation.
The hurdle to unveil this consumer site financial aspects lays in huge fragmentation of millions consumer site assets and interests, which are difficult to oversee under current centralized technology and market designs. Simply speaking, blockchain platforms do nothing more that supporting to overcome these barriers. They create basic environments to support anybody to participate in Grid Edge Economics to build, enroll, and operate its services in a simple and secure way.
So next time you come home, take a look at your utility bill. Under new angle of course…