Energy. A common language everyone speaks no matter the culture or country they are born in. Yet, political tensions and exorbitant costs have threatened the livelihoods of many due to the unequal distribution of energy.
Below is a diagram provided by the BBC that shows the intensity of energy consumption in developing countries.
With the advent of blockchain technology, however, the diagram above can be altered to reflect a more democratized distribution of energy across the globe. Alongside the introduction of new technological measures that have advanced the development of demand side responses and the implementation of smart meters, uprising digital peer-to-peer platforms have blossomed to bridge green energy producers directly to consumers, ushering in a novel era of an energy sharing economy.
Clearly, blockchain technology has gained greater prominence in the energy community. Earlier this month, Japanese corporate giant Sumitomo Corporation Group and the reputable firm Shell has invested in U.S.-based blockchain firm LO3 Energy that aims to create a “transactive energy platform” to provide better traceability in tracking energy sources across various supply networks.
With such growing enthusiasm among energy experts, one can’t help but wonder what’s so fascinating about blockchain that has enraptured the hearts of many. Let’s get straight down to business and explore the many ways energy can be optimised through blockchain technology.
1. Blockchain Can Improve Energy’s Existing Infrastructure
One of the key factors resulting in the energy sector’s inability to adapt to changes in the market is the outdated infrastructure and business models that most energy grids currently operate on. With the introduction of blockchain technology, however, the energy infrastructure can be optimised to deliver a more efficient and transparent energy grid.
For instance, Energy Web Foundation (EWF) has pioneered an enterprise-grade blockchain platform tailored to the sector’s regulatory, operational, and market needs. As the world’s largest energy blockchain ecosystem with a growing community of over 100 energy market participants, EWF has become the industry’s largest energy blockchain ecosystem and leading choice for decentralized technology powering the world’s energy future.
2. Blockchain Can Provide Greater Transparency in Energy Data and Provenance
Most of our energy is derived from the burning of fossil fuels which can adversely impact our environment in the long term, thus, companies are gradually shifting to low impact and renewable energy sources to reduce the carbon footprint left behind. As more energy consumers are going green, the demand for greater transparency has risen and blockchain’s distributed ledger system has stepped in as the perfect spy to trace energy sources and their production site.
For instance, blockchain-based firm Lition is developing an advanced scalable public-private blockchain with deletable data features to trace commercial products and their origins, such as energy.
3. Blockchain Can Incentivise Investments in Renewable Energy
Everyone wants a share of their pie but the price to get started may just be too high. One of the greater obstacles inhibiting companies from going green is the sheer cost involved with using renewable energy sources. With blockchain, however, an incentive system can be created on chain to reward green behaviors and investments in new renewable energy resources.
For instance, WePower is a next generation green energy procurement and trading platform that connects consumers directly with green energy producers for them to procure green electricity at competitive rates with full transparency through digitally-enabled PPAs.
4. Blockchain Can Enable P2P Trading of Energy and Microgrids
Sharing is caring and blockchain technology enables exactly that. Through blockchain technology, peer to peer (p2p) sharing and exchange of energy surplus can be realized in smaller communities for greater efficiency and cheaper rates, creating a microcosm of self-sufficient microgrids.
For instance, PROSUME is a blockchain-based platform that, thanks to its own decentralized and self-regulated monitoring system, guarantees an autonomous, independent and digitized smart place that will permit users to exchange different energy sources, promoting and accelerating new energy community models.
5. Blockchain Can Tokenize Energy
Say goodbye to cash as we know it as digital payment takes the lead. Even though a household often has more than one occupant using energies such as electricity, traditionally, utility payment can only be made through an account via checking. With blockchain technology, however, users can share portions of the payment through the tokenization of energy, enabling fractionalized ownership!
For instance, Konrad, an upcoming asset tokenization platform, offers asset valuation, asset tokenization and trading services — including energy. With a robust ecosystem that is designed to facilitate asset tokenization, Konrad can connect energy suppliers with consumers, while delivering on the side a greater diversity of assets on its platform, truly offering a delectable asset tokenization experience.
Conclusion
Energy has seen leaps and bounds since its inception many years ago. Yet, the current distribution of energy remains uneven and the greenhouse gases produced might exacerbate global warming and the destruction of our planet. With the advent of blockchain technology, however, this apocalyptic premonition might just be averted for greener pastures (or energy sources in this case).
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