How Blockchain Gives Consumers the Power to Choose Real Green Energy
I want to talk about two green electricity myths. First myth: Choosing your electricity supplier is complicated. Second: Green electricity is expensive.
Which options do you have when you choose your electricity supplier?* The first option is to go to any comparison portal and choose the top entry because it is the cheapest. Many companies will give you a newbie bonus which will significantly reduce your bill in the beginning. This is not economical for the supplier, as they hope that you stay for five or more years. As soon as your contract ends you can look for a new supplier and cash in on another bonus. This tactic has put a lot of pressure on the fat cats i.e. the traditional energy suppliers. For decades they have abused consumers’ lack of options. Switching your energy supplier via such a price portal is a good way to show that you don’t accept their ridiculously high priced “dirty energy” — Germany has the highest prices for electricity in Europe.
However, there is a downside to this method: If you forget to cancel the contract you are stuck for another long period with high prices. Also, there are so many options that you do not really want to think about — contract duration, price guarantee, notice period, prolongation, advance payment… Why does such a simple product have to be so complicated? And what if you want explicitly green energy? That’s where the real complexity starts. There are so many so called green electricity certificates out there. If you really want to waste your time on the arduous task of understanding the differences between those certificates, well, then you must be a crazy person like me. Additionally — and this point renders those comparison portals completely useless — the big companies pay for the top ranking spots. That’s not really an independent comparison, is it?
Now, if you have committed yourself to a green power label, you soon realize that all the offers have comparatively high prices. That is partly due to the substantial fee the provider has to pay for the label. Furthermode, they also build upon decades old, inefficient standard industry processes and they rely on additional middle men and service providers to buy power on the central electricity exchange and satisfy your demand.
Sounds pretty complicated and expensive, huh? Well, there is another option! It is called blockchain-based peer-to-peer-trading. It sounds like something from the future, but it is already feasible today. It sounds like something for tech-nerds but it is a fairly easy option for everyone. It means that you can buy your electricity directly from the power plant of YOUR choice (not the energy utility’s choice). Let me give you an example why this is so great:
Say, your parents have a photovoltaics-facility on their roof. You have just moved to another city for your studies. All of a sudden, they produce too much energy because you do not play your favorite online multiplayer game all day long in your childhood room anymore. They would like to send their excess energy to your new shabby-chic shared-flat, because they love you and they want to support you. In the old world that was impossible because you had to buy your electricity from a big centralized energy utility. Now, you and your parents can both participate on a peer-to-peer-marketplace, where a smart contract, executed on the blockchain, automatically transfers the excess energy to your account. A green power certificate is not necessary because every transaction is accessible on platforms such as Etherscan, providing 100 % transparency and trust, while at the same time keeping your private data secure.
This is possible through the blockchain technology used by innovative new energy suppliers like Lition. In past years, blockchain was mainly known as the base technology for Bitcoin. However, clever minds around the globe have refined blockchain systems so that not only do they make peer-to-peer-trading possible (so you can get your energy from your parents, your best friends or any green energy producer of your choice); they are already working on further use cases such as time sensitive tariffs, grid management, and many more. I guess it is fair to say that the energy revolution has started.
*This applies only to a liberalized electricity market (i.e. a country without an electricity monopole that prevents you from choosing anything) such as Germany, UK, Singapore, several states in the US etc.
