Power Shifts — How Blockchain Can Electrify the Energy Space
A decade since blockchain burst onto the scene — in the form of Bitcoin and as a response to the global financial crisis — we are now witnessing the emergence of use cases that go beyond Satoshi Nakamoto’s wildest dreams. From identity management to data storage to adult entertainment, the possibilities are still far from being exhausted. Yet for every one of these innovative use cases, there are a hundred more that do not actually require a blockchain. Here’s a helpful flowchart to help you decide if a blockchain is justified for your project. More often than not, the answer is ‘No’:
The good news for us at Electrify: the energy sector is where blockchain can really thrive and give things a much-needed jolt. In fact, one could argue that energy is the most important application of the technology. Here are some of the key blockchain use cases in the global, trillion-dollar industry:
Decentralized Energy Trading
Blockchain allows prosumers — those who not only consume but also produce — and consumers to transact energy with each other in a peer-to-peer (P2P) network. This removes the need for any intermediaries, thereby lowering transaction costs for all parties. Consumers can purchase electricity by selecting providers directly from an online marketplace or they can automate trading by executing smart contracts that take into account their electricity preferences. Once these transactions are made, they are stored on the blockchain immutably and energy is delivered through the grid. The seamless and third-party-free matching of consumers and producers will lead to fairer prices across the board and ultimately incentivize renewable energy production in households, e.g. rooftop solar PV, small-scale wind turbines. Electrify is trying to achieve exactly this with our blockchain-based Synergy platform, enabling P2P energy trading across a main grid. Look out for an upcoming article explaining the difference between a main grid and microgrid, and why Electrify is poised to create bigger, scalable impact with its main grid solution.
Metering with IoT Devices
Internet-of-Things (IoT) devices are communication platforms that can relay information wirelessly to a network. Integrating them with conventional smart meters will allow for the collection of energy consumption and production data. The data may then be broadcast to the blockchain network for verification and secure storage. All parties have access to this data; producers and prosumers may use it to track their energy generation for billing while consumers can benefit from a better understanding of their consumption patterns. Electrify’s PowerPod is one such device capable of logging the amount of power used and produced; linking it to the blockchain will increase data transparency and metering efficiency, ultimately creating cost savings for all.
Renewable Energy Certificate Tracking
When trying to purchase a unit of renewable energy, knowing the source — or provenance — of that unit is key, otherwise how can you ever be sure if what you are paying for is truly renewable? The immutability of transactions on the blockchain lends itself well to such tracking, specifically the secure documentation of Renewable Energy Certificates (RECs). A REC is a record that proves ownership of one megawatt-hour of renewable energy. These records can be used by consumers to verify the ‘renewability’ of their energy or claimed by corporate entities to meet certain green standards. RECs may also be traded on a market. However, the lack of a robust and standardized accounting system has, in some cases, led to the double counting of these certificates, meaning that an REC can be claimed twice, even thrice. This leads to the recording of more megawatt-hours of renewable energy than was actually generated. Blockchain can solve this issue with its tamper-proof timestamping and decentralized storage of records, paving the way for a more transparent certification system. Electrify’s eWallet will allow consumers to keep track of their RECs, securing provenance as part of the march towards the adoption of renewables.
Past all the hype, price crashes, and kitty crashes, the blockchain is, at its heart, an inclusive technology with the potential to introduce greater liquidity into energy markets and democratize energy production and consumption. It does not only serve the energy incumbents; it brings into the fold small scale producers and consumers, equipping them with utility-level trading tools that were previously not accessible to them, allowing them to participate in a system of energy exchange that they would typically be excluded from. In the long run, this has strong implications for the sharing economy and sustainable consumption. Electrify, with our Synergy P2P solution, is proud to be a part of this vision to empower producers and consumers as well as contribute to meaningful change in the energy space.
