By Gurudutt Perichetla
Guided by Sukant Khurana
There is an increasing demand for clean energy. With natural resources being depleted on an everyday basis, we need alternative sources of energy. How does Blockchain fit into the equation?
The Issue with Global Energy
If we consider various industries such as technology and media, we observe that the entire market is heavily monopolised by just a few corporations and organisations. In the case of technology, Facebook owns social media platforms such as Instagram and Whatsapp. Similarly, six corporations control ninety percent of the media in the USA. This is also the case in the global electricity market which is estimated to be worth approximately two trillion dollars.
Corporations are aiming for total control and also have restricted the sale of energy. This is primarily attributed to the reason that resources such as coal, oil or gasoline are limited and non-renewable energy sources. As a result, consumers and end-users do not contribute as major players and are only reduced to be subscribers to pay fees to gain access.
The Adoption of a Blockchain Model
The general idea behind blockchain technology is to allow decentralisation and build security. In technical terms, blockchain can be described as a shared, replicated ledger system that is distributed across all members of a network through peer-to-peer technology. The advantages of blockchain are increased trust and minimization of time for a process to take place. Moreover, it also removes cost overheads and intermediaries.
The adoption of blockchain in an energy marketplace allows people to buy and sell energy among consumers. This eliminates the need for third parties. The idea to build peer-based energy and electricity markets also allow payment using cryptocurrencies but through blockchain technology transparent exchange can also take place without cryptocurrencies. This also brings forward the idea of dynamically adjusting electricity rates based on demand and availability — a foreseeable implementation using machine learning technologies.
Micro-grids and Other Projects
Micro-grids allow communities to use and trade energy. These micro-grids are a localized group of synchronous sources of electricity and loads that act as a single controllable entity — similar to a cluster. The advantages of such a system allow minimization of overall consumption of energy and sustainable development, without impacting the environment.
A Switzerland based startup called MyBit has been exploring the idea of using solar energy, artificial intelligence and IoT to develop a decentralised energy grid. Similarly, a UK based startup called Electron has been using blockchain technology to design and develop efficient and scalable systems for energy trading and grid-balancing solutions.
Smart Contracts and Energy Trading
An Australian company, Power Ledger, has brought up the idea of buying and selling of renewable energy in a peer-to-peer trading manner. The inclusion of Blockchain allows the creation of a transparent, automated and audible record of energy generation and consumption. This allows the saving of energy and a positive effect on climate. Power Ledger has partnered with Northwestern University to enable the trading of clean energy, with no hardware, software or subscription fees.
Similarly, WePower, a Lithuanian startup, has begun issuing smart energy contracts to connect buyers directly with green energy producers. The vision of WePower is to help accelerate the world’s adoption of renewable energy for a clean future. These smart contracts represent the amount of energy that a power plant has and how that energy is distributed. This is achieved by linking the smart contracts with the power grid and energy data on the blockchain.