Estimated reading time: 4 minutes, 37 seconds
Hi, this is Melissa with , and today we will be talking about how the blockchain will affect the energy sector.
The global electricity market is estimated to be worth about 2 trillion dollars and is primarily monopolized by a few corporations. These monopolies and oligopolies’ lack of transparency and lack of competition affect prices and consumer trust.
The grip these monopolies have is weakening as more and more people are generating their own solar and wind energy. Smart grids allow prosumers, (energy producers that also consume a portion of energy as well) to sell their excess power to others. The is helping move this forward by allowing all transactions to be securely stored on the distributed ledger and executed with Smart Contracts. Consumers will be able to scan through blockchain listings to find the best and closest deals. This would be more of a reality for someone who lives in Arizona and has a neighbor with a solar panel vs. someone in Portland. It’s an exciting step forward, but solar energy isn’t a perfect solution to living totally off the grid. I’ve watched a few testimony videos of people that live with 100% solar power energy, and they have to turn appliances like air conditioners off to flush their toilets. Still, solar panels can be a great addition to people wanting to reduce their energy costs while still being able to use ComEd (or your local energy provider) as a backup if it was a cloudy week where they lived.
Another impressive feature of using the blockchain to keep track of energy usage is consumer transparency. Imagine buying a house or renting an apartment and being able to look at previous utility bills and not just trust the seller’s estimates. Although utilities vary based on usage, this can still help people budget and see if the building might need new windows or better insulation.
Under the current system anyone that has excess solar or wind energy can sell it back to the electric company; however, the seller loses a lot of energy in the process of transporting it back to a central place until it is sold to someone else.
Power ledger is a P2P energy platform that allows consumers with solar panels to sell excess energy to their neighbors. It’s like Tinder for solar energy. They pre-purchase their energy, and the facilitate the rest of the trading of their excess energy.
This P2P trading platform allows customers more control over the price and instant bill settlement instead of waiting 60 days with a traditional energy company.
Their ecosystem uses two : POWR and Sparkz. POWR are the tokens you’d buy on an exchange, while Sparkz is used only within the platform and is generated when POWR gets entered into a smart contract escrow. Rather than being a large corporation reaping the benefits, the success of the Platform flows down to the users and the early supporters.
Anyone looking to use the Power Ledger platform will need to have smart meters fitted into their homes, and data from these will be fed into the blockchain to ensure payments can be directed appropriately based on electricity production and usage readings.
The benefits of microgrids are that they can be used as an emergency backup in situations when there are issues with the main grid. Natural disasters like floods, earthquakes, and hurricanes can cause service disruptions by affecting centralized grid infrastructure. In such an event, microgrids can sustain the community until the main grid is back online.
Other platforms in the space offering similar buyback models with the blockchain
- Energy Coin
- Solar Coin
- Solo Energy
Cryptoslate has a great resource that breaks down 22 different energy cryptocurrencies
EventHorizon is an annual blockchain energy summit with 80+ energy and blockchain leaders in attendance. People are really starting to see the benefits of the blockchain and smart contracts on these industries.
Although work is underway to overcome the challenges, the fact remains that today’s blockchains are costly, slow and do not scale well.
Partnerships with Iota are being tested with Volkswagon and Engie, an energy company, to test capability to handle scaling. Iota is being looked at because of its design as a platform for the internet of things.
Although these platforms do not reduce the amount of energy miners use on proof of work confirmations, the execution of smart contracts or the mining of tokens, it does allow miners to buy green energy off their neighbors to complete these tasks. Being able to choose green sources of energy vs. alternatives helps reduce the carbon footprint leaves, which is a huge objection of many people for cryptocurrencies mainstream adoption. Big crypto mining farms in Japan see renewable energy sources as the only way to stay profitable in the up and down swings of the market. Energy costs being high almost forces miners into doing the right thing since it is the most profitable route. I also think it is important to have miners connected to renewable energy in case of natural disasters or instances of government censorship of the internet.
That being said the innovation in the space is still encouraging to offering people cleaner energy, more autonomy, and more options when structuring deals revolving around solving issues of energy transport, storage or access during natural disasters.