
Internet of Energy
I’m sure we all have memories from early education, teaching us that wildfires played an essential part of the natural process of renewal. Although they could be devastating in the short term, they were nature’s way of removing aging parts of the ecosystem and using the nutrients left behind to fuel new growth.
That certainly doesn’t feel like what is happening in California right now. It is often the failure of man-made systems that are causing huge wildfires, leading to loss of life and destruction of communities. But what if we take our cues from nature and use the current destruction as fuel for something else. Change that could alter the way the entire world consumes energy and increases the proliferation of renewable energy.
The scale of energy suppliers inhibits their responsiveness and they are protected from disruption because the market is inaccessible. Consumers have rising prices, poor service and faltering infrastructure. We suffer from a lack of innovation because we lack competition. Having lived in London, Shanghai and now LA it is equally amazing and maddening to have the worst infrastructure in what is supposed to be the state leading the world in tech. But the raw ingredients are in place for California to lead in energy too. We have the climate, tech talent and political will to develop the new direction.
I don’t have all of the answers. I am certainly not an expert on the industry or its regulations as they currently stand. I do have some thoughts about how we could move towards the future which I think are worth sharing…
1: DECOUPLE SUPPLY FROM INFRASTRUCTURE
Many energy companies are responsible for both energy creation and distribution. As such they will always favor investment in ways to drive down cost on creation (which makes them more profitable) vs distribution (which is a necessary cost of doing business that drives profits down). This results in underinvestment, crumbling infrastructure and dire results like some of the recent fires we’ve had in California. As a final insult to those affected, PG&E can file for bankruptcy to then protect themselves from the repercussions of that underinvestment.
The alternative?
a) The state owns the infrastructure and charges energy providers for the privilege of access, or…
b) The state auctions off the rights to manage infrastructure to business(es) with state mandated fees paid by energy suppliers
In both scenarios we could expect much more focus on our aging infrastructure.
2: CREATE A UNIVERSAL ENERGY LEDGER
We need to encourage renewable energy production at every level, and I believe that if anyone creates energy on their property using equipment that they own (or lease), they should be able to sell that energy at market rate.
Creating a blockchain energy ledger where there can be unlimited users seems to be the sensible solution. Any of these users can contribute energy via ‘infrastructure approved’ energy creation systems (anything from a solar panel to a nuclear power plant). Any of these users can draw energy from the infrastructure. In both scenarios the detail of that transaction are recorded on the distributed ledger.
3: ESTABLISH PROTOCOLS THAT ENABLE AN ENERGY MARKETPLACE
The final step is to encourage a marketplace for innovation. A marketplace should quickly establish itself once common language, syntax and transactions protocols are put in place. Just as Tim Berners-Lee developed the standards for the web with URI’s, HTTP & HTML etc, I imagine we would need the same for energy. It looks like some of that work has already been done by the energy industry with CpML, but more is likely needed.
Some IoE thought starters…
- Homeowners becoming net (green) energy providers and receiving tax benefits for doing so
- New energy companies give the consumer the choice of selecting purely clean energy sources
- Applications that optimize the sale of your energy based on what you need vs what you create / have in storage
- Farmers shifting from producing food to clean energy because it makes economical sense
- Additional infrastructure fees levied for KW’s of power generated from outdated fossil fuel production methods
None of this is revolutionary, parts of it are in place with companies such as Solshare creating micro renewable energy grids in rural Bangladesh, Sense developing products enabling a smart grid and Tesla leading the way in storage which bridges the gaps in natural energy to be harvested.
What we need is government action to support the inevitable. I believe that California should lead, and in doing so drive national, continental and eventually global adoption . This action would exponentially increase innovation and our speed towards a renewable energy future as a result.
Disruption moves the world forward, and it is our duty to disrupt whenever we see businesses causing misery for our generation and the ones beyond. Let’s use the fear and anger caused by the current wildfires as a tailwind for change.
