Clean Energy, powered by Blockchains

Do blockchains hold the future to clean energy? Perhaps.

Mohit Mamoria
Jul 6, 2017 · 8 min read

The entire world, whether you are aware of it or not, is going through a remarkable shift. Things will not be the same anymore. Everything that you have learned while growing up will be invalidated and disrupted. This particular wave is fueled by changes to three fundamental human behaviors in human beings — us.

We don’t think the usual anymore.

By the way, I am curator of a weekly newsletter, Unmade, which delivers one idea from the future to your inboxes.

1. Adoption of clean energy

“We have this handy fusion reactor in the sky called the sun, you don’t have to do anything, it just works. It shows up every day.” — Elon Musk

For decades, human beings depended upon fossil fuels — wood, coals, oil and natural gas — for their energy needs. Be it heating our homes, commuting to a place, cooking our food, or creating new things; the fossil fuels have been our go-to solution to everything.

After exhausting most of them, we have now realized that if radical steps aren’t taken, we will soon run out of fossil fuels. Otherwise we will be left to live life on a barren planet that was once called ‘The Blue Planet.’

Our species that was the most irresponsible towards the planet has finally started showing signs of owning up the mistake. Realizing the mistake is a huge step towards fixing it. Companies are building solutions for the masses to generate, store and use clean energy. Solar is the front-running candidate for clean energy. Soon, fossil fuels will be a thing of the past, and we will get to see the bright blue sky over our heads again.

2. Disrupted trust in the central authorities

“Nothing strengthens authority so much as silence.” — Leonardo da Vinci

While we were evolving, we had to learn whom to trust or not to trust. It was a question of our survival then. We formed tribes, groups, and communities to build trust among ourselves. Still, trusting another group or community was out of scope. To mediate this, third-parties came in that delivered trust as a service.

Consider a bank. An individual can store their assets in the bank, and so can another. If those two people wanted to transact with each other, they could tell their banks to move assets from one’s account to another’s. Both individuals trusted the bank; thus, they trusted each other.

Trust-delivering corporations soon started controlling the masses because of the leverage they held over this basic societal need for transaction ease and fluidity.

There’s no bigger leverage than the leverage of someone’s trust.

Every species evolves, and we have too. We’ve found other ways to trust strangers than depending on a third-party. Blockchains are the future of trust.

3. Choosing access over ownership

Let me listen to the song I want to, when I want to, where I want to, and I won’t bother whether or not I own a copy of the song. This particular change in behavior is massive, and perhaps the most important one.

Every animal species has a natural urge for ownership. Humans are giving up on it.

Lions consider themselves owning a part of the jungle. Cavemen found themselves owning women in their tribe. Birds think themselves owning their nests. Humans today see themselves owning their homes, cars, and entertainment.

In the last years, companies have proven that giving up ownership in favor of access comes with additional benefits. One, the cost of owning is much larger than having access to it. If we include the cost of maintaining, the cost goes up even further. Two, the efforts to keep owned assets in a top notch condition are significant.

Some of the biggest companies today — Uber, AirBnB, Spotify, and Netflix — are built on the same core idea of replacing ownership with access.

What happens when we combine these three trends into one?

“When dictatorship is a fact, revolution becomes a right.” — Victor Hugo

Perhaps, I am wired differently, but I see the world through a different frame of reference. I often wondered how these three shifts in human behavior could affect the society as a whole. Today, I have an answer.

Right now, there two ways to get energy in a house, and they are -

  1. produce your own, or
  2. get some from the grid.

Let me propose a third one.

Produce and Share

Imagine a town that has decided to go completely off the energy grid. Like always, not all the houses in the town get an equal proportion of sunlight on their roofs. Take any street. Houses on one side get ample sunlight, and the houses on the other side don’t. Instead of complaining, the town decides to do something about it together.

The houses that get ample sunlight install the solar panels and the batteries. The cables from those solar panels go to every house in the town, thus, turning the whole city into what I’d like to call…

A Local Energy Grid

The houses that have solar panels installed will be the producers in the grid, and the others will be consumers.

The role that each house plays in the grid will be enabled by a device that every house in the network installs. The device is the crux on top of which the Local Energy Grid works. It does two things —

a.) Allows consumer and producers to trade energy online, on top of a Blockchain

Producing and storing energy is a solved problem. What is exceptional about this new idea is the sharing of the excess energy with peers. There was no reliable protocol to do that — until today.

Blockchains have made it possible to trade assets without the need for a middleman to provide the trust. It allows two people to transact and be sure that both will fulfill their promises. This particular marketplace will run on top of a public blockchain where the producer will trade the excess energy for money. There will most likely be a cryptocurrency token on which the blockchain will transact. (Someone must go, write a whitepaper and raise some millions!)

Households interact in the marketplace through the device. Each device has an address that represents a house on the network. As soon as a house buys energy, the grid works to…

b.) Route the energy to the device that paid for it

As soon as a transaction is complete, the grid figures out the shortest path in the grid between the producer and the consumer to route the energy. Because the network is a graph, there will always be a route between the producer and the consumer.

The producers get compensated for their production, thus, bringing down their cost of using solar power for their homes. The consumers pay a lesser price to get access to the solar energy in their homes. Overall, the average price a household pays for clean energy goes drastically down within a Local Energy Grid.

Nitty-gritty worth thinking

Disclaimer: I do not have all the details worked out, but this could be an idea worth pursuing. I would love to discuss more in the responses below. However, I could think of some aspects in depth.

“I learned no detail was too small. It was all about the details.” — Brad Grey

1. Who owns up the responsibilities to form the grid and maintain it?
In my head, I imagine a private company that helps connect houses in the Local Energy Grid, provides the routing devices and runs the marketplace for trading. It is challenging to align a crowd; thus, it must be a separate entity that takes up the responsibility.

Also, a partnership with a local government body could help a great deal with the adoption.

2. Will every house in the town be forced to participate in the grid?
AirBnB allows people to put up empty rooms up for rent, but it doesn’t force everyone to do so. People do it at their discretion. Not everyone wants to make extra money from the empty rooms. They might want to put the room to some other use or might be afraid of strangers living in their homes — a fair decision.

In our case, there aren’t many choices when it comes to excess energy. More energy could be produced in a day than what a household can consume. They can either let this excess energy dissipate into thin air or share it with peers. There’s no other choice.

It will never be forced, but it is implicitly implied that participating in the grid is a better choice.

3. What if I want to continue using the existing central grid?
That’d be your choice completely. But remember the trend — the world is going towards clean energy. It is only a matter of time before you will have to either produce your own clean energy or be part of the Local Energy Grid.

However, going solo will be more expensive than being a part of the Local Energy Grid.

4. Thoughts on security?
This is by far the most concerning thought I have. What if someone tries to snoop and steal the energy for free? Because every home is on the grid, the energy could be routed to a thief’s home too.

The blockchain will secure the digital part of the system, but a dishonest person can physically damage the cable to steal the energy. One way to prevent this is to remove him/her from the grid as a punishment. Solutions can be found, but I wonder if there’s any way to prevent such incidents from happening in the first place.

The three trends I have described will disrupt several stagnant industries, and bring the incumbent controlling players to their knees. The mammoth players in many industries will be cut down, and the new saplings will have room to grow into huge trees themselves.

These three trends will make our world a better place by enabling all of us to work together, instead of individually. That’s the way I see how clean energy will be distributed throughout the globe — by producing and sharing.

Amazing things happen when we come together.

“Everybody pulls for David, nobody roots for Goliath.” — Wilt Chamberlain

About the author

Mohit Mamoria is the curator of a weekly newsletter, Unmade, which delivers one idea from the future (just like this one) to your inboxes.

This is an Unmade edition, repurposed for a blog post.

Thanks to Doina for proofreading and editing the piece.

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Mohit Mamoria

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A network of business & tech podcasts designed to accelerate learning. Selected as “Best of 2018” by Apple.