Seth Ward | CEO/Founder @ Pynk.io
We’re living in a time of increasing decentralisation.
It’s being proven over and over that large, unwieldy, centralised structures lead to inefficiencies, resistance to change and systems that don’t meet the needs of society.
Take finance.
Over the last decade people have been enabled to create their own money and safely store and send it anywhere in the world without requiring us to trust governments or banks.
We’ve seen how badly that can go and a few individuals decided to do something about it.
They created Bitcoin.
This technology is opening up all kinds of new possibilities by allowing people who don’t know each other to work together, without trust being an issue.
The dispersed, decentralised nature of the system almost effortlessly ebbs and flows and responds to all manner of needs, threats and opportunities.
Look at business.
For decades, they became bigger and bigger, acquiring more assets, employing more people and burning through more and more capital.
Massive amounts of power and influence held by a few board members became the norm.
Why? Because this was the most efficient state.
High transaction costs meant this was inevitable.
The cost of companies finding reliable suppliers, negotiating a deal, being able to trust they’ll deliver what has been agreed - on time - and of holding them to account when things went wrong, meant they absorbed almost every aspect of production.
With the internet (among other things) this has been transformed.
There are digital markets and platforms everywhere so finding people and suppliers is easy. Contracting is easy, too, almost automated. Trust is being improved through things like reviews and blockchain.
So now we’re seeing huge changes.
Some of the fastest growing companies on earth have almost no assets.
We’ve all heard of the biggest accommodation provider in the world having no properties; the biggest taxi firm having no cars or drivers. And many more examples.
These businesses are powered by ordinary people all over the world.
They remove huge amounts of friction from the system and allow it to grow and meet demand as required.
Now it’s time for crowd powered power.
Power is one of the biggest industries in the world.
And one truly in need of improvement.
Some of the ways we’ve historically obtained power and delivered it to homes and businesses have led to huge amounts of pollution, war and destruction.
But technology holds the promise of changing all this.
Returning ‘power to the people’ so to speak.
Think about how inefficient our current way of doing things is.
We have to do things like sending human beings down dangerous mine shafts, digging away at rock to remove coal. This is then transported and stored. It’s then burned, destroying our planet’s defences and polluting the atmosphere. We can’t store the electricity produced, so our governments or energy companies have to predict when people are going to need it. And they always have to produce more than is needed so that the lights don’t go out.
Or, nuclear power. Billions of dollars required to create the places that create it. Meltdowns can and do destroy huge areas of land and sea and result in death, sickness and mutation in flora and fauna. Even when things go to plan, the waste produced is highly radioactive and has a halflife measured in centuries that means it could present problems in the future if disturbed.
There’s even controversy about the national security risk that comes from allowing foreign entities to run things as essential as nuclear power stations — as we saw in the UK with the deal for France and China to run Hinkley Point C.
Critics point out that even without this risk, the economics don’t work.
At a time when renewable energy costs are plummeting, the UK has just signed a deal that guarantees its citizens will be paying billions a year - for decades - to French and Chinese entities, at rates that may seem outrageous in just a few years.
New, renewable clean energy tech holds out promise to fix many of these issues, but the storage and planning problem has remained.
Elon Musk is one of a few people with a vision of how the electricity problem can be transformed along with the ability to do something about it.
While many people think of Tesla as a car company, it’s much more than that.
It’s about power.
The success (regardless of the plunge in Tesla stock price as I write this) of their car sales has meant that their battery technology has moved forward quickly.
We’ve already seen fairly significant uptake of solar panels by homeowners worldwide.
I’m one of them - I took advantage of an offer that meant I could have them installed totally free of charge.
I get free electricity (which comes in handy for minimising the costs of running my crypto mining rigs and making them more eco-friendly).
The company installing them gets an income by selling the excess power back to the grid.
Government subsidies, reducing costs and the promise of less pollution is leading to a quiet revolution as people and businesses are now doing the same at increasing rates.
There are estimates that 70,000 panels an hour are being introduced to power grids globally over the next 5 years according to the International Energy Association.
In the UK, we’ve seen records smashed repeatedly for extended periods without coal being used in the grid — just last month, the UK’s National Grid said that the new record of 90 hours had been achieved.
Coal power should be completely phased out here by 2025.
But this is only the first step.
The true revolution comes once another few things are in play.
- Energy storage (using batteries) becomes widespread
- Individuals and businesses are guaranteed to be able to earn a fair rate in return for providing power back to the grid
This is where what Tesla - and other battery tech companies - are doing gets exciting.
Because once people have solar panels (or indeed other clean tech such as wind turbines) combined with batteries, we have a truly decentralised grid.
One that doesn’t depend on centralised, inefficient planning and decision - making.
It’s great that companies are installing batteries — such as Scottish Power who just announced a 50M battery connected to a wind farm in Whitelee.
This means that they can be charged up overnight when demand is low, and energy is released during the day. Whereas at the moment much of the potential created during the night is simply wasted.
But relying on these big companies means things move slowly, and the profits are kept by the few.
Progress only happens in fits and spurts.
And something that’s just been announced in the UK move us one small but important step forward towards a decentralised grid.
The government here has just announced that our big energy companies will HAVE to buy renewable energy from their customers under new laws, starting from 1st January 2020.
This was a badly needed step after recent withdrawals of subsidies resulted in a 94% drop in solar purchases.
If the rates paid are fair, we can expect a significant increase in uptake.
Leading to a grid where many homes are largely self-sustainable.
Your panels will provide almost all of the power required during sunlight hours.
Your electric cars - if you even have them - will be charged by these solar panels.
Plugged in overnight, they can feed power back into the grid, earning money.
With separate batteries installed in the home, more and more of the 24-hour cycle can be provided by individuals.
This storage will initially be used to reduce reliance on more polluting forms of power and reduce the risks of power shortages.
In the UK, and other places where these types of measures are implemented we can hope to approach the levels of takeup already seen in Germany where half of all solar installs are combined with batteries and over 1 million solar installations (120,000 combined with battery storage) have already happened.
There are limits to the potential of the current technology - the current lithium batteries are too expensive and don’t store power long enough to be overly useful in places where there are extended periods of darkness and loss of wind.
But as we see more and more demand for in-home battery storage, we will no doubt see those problems solved by projects such as Breakthrough Energy Ventures (backed by Bill Gates). They’re developing aqueous sulfur flow (think salt-based) batteries that could cost a fraction of lithium and last considerably longer.
If those succeed then we really could be seeing 90% of most grids’ power requirements being filled by renewables.
And as we’ve seen with Airbnb, Uber and others, much of this will be powered by individuals operating for a share of the profit rather than the energy behemoths we see today.
My next hope is that we see fair rates and ethical business practices from the companies disrupting this market instead of some of the controversy we’ve seen from the likes of Uber.
Indeed, here at Pynk - where we’re focused on helping decentralised ‘tech for good’ startups to get off the ground, raise capital and grow - we hope to be investing in companies doing just this kind of thing in the near future.
If you know of any - or you’d like to start one - please get in touch!
Disclaimer: Please bear in mind that this information does not constitute any form of advice or recommendation by Pynk One Ltd. and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Appropriate independent advice should be obtained before making any such decision. When investing, your capital is at risk and you may recover less than the initial investment.
