How blockchain is making communities more resilient

In 2017, Hurricane Maria knocked out 80% of Puerto Rico’s transmission lines, plunging the entire island into darkness — and leaving some people without electricity for nearly a year.

For many people, months without power meant they could no longer refrigerate vital medications. It meant they couldn’t get the health care they needed, because medical facilities were closed. And, for nearly 10% of the affected population, it meant they could no longer power respiratory equipment.

Indeed, disrupted access to healthcare resulted in an estimated 1,500 deaths, according to a study by The New England Journal of Medicine.

Hurricanes have inflicted their fair share of damage on the continental US as well.

Hurricane Michael left 1.5 million people without electricity at its peak, some of whom may not be able regain power for weeks — while Hurricane Sandy indirectly resulted in the death of 50 people after leaving thousands without power for nine days.

Annual costs of weather-related outages in the United States have been estimated between US $25 and $70 billion, without even factoring in business losses or extra fuel costs for powering generators.

With annual US spending hovering between US $5 to $10 billion on operations and maintenance — not to mention US $161.8 billion spent in the last 4 years on expanding infrastructure — one would think life-threatening power outages would have already become a thing of the past.

The electric grid is more fragile than we think

Our electricity system operates under a centralized model, whereby distribution centers directly deliver electricity to individual customers via power lines.

In other words, electricity is linearly transmitted from a single energy source to the end consumer.

That means that if anything disrupts that line of electricity — for example, 150 mph winds projecting a large oak tree at a power line — the electricity connection is broken.

Note the use of the singular. If a — singular — power line goes down, the electricity connection is broken, resulting in region-wide blackouts.

If we could modify the grid so that electricity could be bought, sold, and traded locally (i.e. directly between nearby batteries and consumers), it could spread out the risk — and drastically increase community resilience.

Blockchain platforms are supporting more resilient systems

Blockchain platforms can be embedded with peer-to-peer smart contracts. This allows small-scale energy suppliers — anyone with a solar panel, generator, or battery who can put electricity back on the grid — to sell electricity directly to consumers without going through a distribution center.

Unlike a centralized system, which can easily be disrupted by the slightest provocation, a decentralized electricity generation and storage system draws energy from multiple supply points — spreading out risk so there is no single point of failure.

That means that when a power line-toppling natural disaster rears its ugly head, a decentralized grid could completely disconnect from the central system and operate in ‘island-mode’ for days, weeks — or potentially indefinitely.

Integrating blockchain technology into the electric grid can protect entire regions from blackouts and, in extreme cases, has the potential to save lives.

What’s next?

The next step is adapting this technology to municipal districts.

Omega Grid, a start-up using blockchain technology to enable peer-to-peer energy transactions, is already partnering with utilities to integrate their software into existing infrastructures — starting with Burlington, Vermont.

Burlington’s municipal utility is already way ahead of the curve in the realm of energy. Not only did Burlington become the first city in the United States to run on 100% renewable energy in 2015, they are also determined to become completely net zero by 2030.

Now, they are partnering with Omega Grid to shift towards a decentralized electric grid — taking resilience to a whole new level.

Omega Grid’s smart contract-embedded platform enables individual suppliers and consumers to directly buy, sell, and trade electricity with another, without routing the transaction through a distributor.

The decentralized, market-based system not only calculates and records transactions between different households and businesses across the grid — protecting financials against a single point of failure — it also integrates an incentive system, whereby consumers are rewarded for supplying the grid with electricity or reducing their electricity usage.

With multiple supply points scattered throughout the city, this innovation might make Burlington one of America’s most resilient communities.

As hurricanes are likely to increase in intensity and frequency over the coming decades, a resilient community sounds pretty good right about now.