There’s been a lot of bad press surrounding blockchain and the environment lately. With the proliferation of NFTs, concerns have been raised surrounding their environmental impact, and analysts are taking a serious look at Bitcoin’s carbon footprint. It’s true that there are issues regarding energy consumption in the world of cryptocurrency, and many of them are still wanting for a solution.
However, if done right, blockchain technology could be employed to solve energy consumption issues as well. Creative companies are utilizing blockchain to make it easier to generate, buy, sell, and consume power from renewable sources. Let’s take a look at a few of these innovative businesses and the potential of their forward-thinking plans.
In most countries, you traditionally don’t have a lot of choice when it comes to your electricity. For example, in the United States, power is regulated as a public utility because of the massive amount of infrastructure required. Everyone in your area gets their power from a single provider, and you don’t get to choose what kind of energy source that power is derived from. The plus side of this system is that the government assures electricity is affordable and that it won’t be withheld from you.
But what if those assurances fell through? In 2020, millions in Texas were left without power following a winter storm, and some were charged exorbitant prices for their electricity. For a variety of reasons, we are now in an age when a lot of people not only don’t trust monopolistic energy concerns, but can generate electricity cheaper themselves.
Many whose homes are equipped with solar panels find they generate more energy than they need, an excess they could potentially then sell to others on the open market. The only thing stopping them has been a lack of proper technology, which is where Power Ledger comes in.
Power Ledger develops software that “allows consumers and producers to track, trace, and trade every kilowatt of energy.” The company’s platform, xGrid, allows for peer-to-peer trading, giving consumers choice and the potential to deal with all their energy needs at the local level.
On the blockchain, units of energy can easily be transferred between users, whether those users are individuals, companies, or the grid itself. If you generate more power than you use, you can sell the excess at a market-determined rate. If you need more energy, you can purchase it at a market-determined price. The result can be energy that is both cheaper and more environmentally friendly.
This technology has additional uses beyond just the sale of energy. It can also be used for environmental commodities like renewable energy certificates and carbon credits. Whether we’re talking about institutional-grade solutions or a consumer-level platform, making energy trading easier and less expensive will only make renewables more attractive, which is a win for the environment.
Power Ledger already has clients in Australia as well as several other countries, and is rolling out its technology in the US. If they’re able to keep up with growing demand and prove their solutions are equally viable for consumers and businesses, you may be hearing a lot about this company in the future.
While Power Ledger works to improve areas where the grid is inefficient, green tech startup Lightency has a different goal: to bring power to those who don’t currently have it. The company is focused on Africa, where as many as 600 million people don’t have access to electricity. By using blockchain to lower the fees of micropayment, they can incentivize “prosumers” who both create and use electricity to sell their excess through minigrids across the continent.
Utilizing Ethereum’s blockchain, Lightency uses its Powerchain solution to bring “all energy stakeholders on the same platform.” The goal, as stated by CEO and Co-Founder Jaafar Saied, is to create “self-sustained communities where energy is traded like any other commodity.” Due to the rural makeup of much of Africa, there is plenty of work ahead of him and his team, but by focusing on areas that are open to new solutions, they have great odds for adoption and a forum by which they can prove the effectiveness of their model.
Instead of trying to envision how the market will look in the future, Iberdrola is focused on problems with the marketplace right now, specifically problems consumers face when wanting to go green. The number-one problem? Knowing where your energy comes from. How can you be sure the power you’re using really is renewable?
Iberdrola’s goal is to utilize blockchain technology “to guarantee, in real time, that the energy supplied and consumed is 100% renewable.” A leading producer of wind power, Iberdrola is no stranger to the world of renewables, and they understand the feeling of powerlessness many consumers have when it comes to their energy consumption. The assurance their power is 100% green will inspire greater awareness and desire to participate in environmental efforts.
Iberdrola’s pilot program will be useful for businesses as well. If a business wants to show its customers a commitment to becoming carbon-neutral, it needs an agreement like a PPA (Power Purchase Agreement), and blockchain could be a way of verifying that this agreement is being fulfilled, helping to catch those making fake promises and rewarding companies who really are going green.
This is just one small part of Iberdrola’s business, but it could have a lot of applications. If the government is to reward corporations for their use of renewable sources, then it needs verifiable proof. That proof can be supplied by the blockchain, and if Iberdrola’s pilot program is successful, it could lead to greater voter and consumer confidence down the road.
Based in Portland, Oregon, LO3 is built on the idea that localized energy has benefits beyond just cost and convenience. With smaller generators and the ability of consumers to profit off household-level production, they can break down historical barriers to entry. And with a satisfying user experience, it will be easier to connect with consumers and build community through shared projects that have both individual and societal advantages.
The company’s digital marketplace solution is called Pando, and is designed to make it easy for consumers to understand and engage with new options from their energy providers. The company prides itself on the platform’s simplicity and ease of integration, working with customers to set up a marketplace in just 90 days.
LO3 teamed up with Green Mountain Power to create Vermont Green, an app that connects local businesses “such as ski resorts, craft breweries and dairy farms with home solar owners looking to earn income from their excess energy production.” These business, many of which can benefit from boasting of their renewable energy commitments, to “top up” their green energy supplies by bidding on excess power.
Only time will tell if the first US marketplace for locally-produced clean energy will inspire a wave of similar projects throughout the country, but the simplicity of the platform and its early adoption in a green-friendly state like Vermont put the odds in LO3’s favor.
Kyocera with LO3 Energy & ALI Technologies in Japan
In 2019, Japanese company Kyocera Corporation partnered with LO3 Energy to test the feasibility of a virtual power plant (VPP) that utilized a distributed consensus network. Kyocera, a leader in solar photovoltaic batteries, and LO3, which provided the distributed ledger, worked to simulate real-world scenarios to “develop new ways to expand the efficiency of existing energy transmission and distribution networks in Japan and worldwide.”
The idea is that the grid is overburdened, and will only become more overburdened as populations expand. The solution to this is a “microgrid,” where power generated from solar panels is shared among consumers. Blockchain can be used to verify and record these transactions, managing energy flow while “reducing the load on the larger grid.”
The test was promising, with experts pointing out that it could have a significant impact on the solar energy market in Japan, a country where many citizens want to move away from nuclear power. In 2020, Japan’s Ministry of Economy, Trade, and Industry announced a continuation of its Regional Microgrid Construction Project involving Kyocera and ALI Technologies, and has also done tests with Power Ledger, putting Japan at the forefront of this new frontier.
All of these projects are still in their early stages, but learning about them can be a helpful counterpoint to the onslaught of negative stories about cryptocurrency’s carbon footprint. It’s important to remember that blockchain is a technology, and just like any technology, some uses are better than others. Understanding the differences between companies and how they employ blockchain allows customers to grant their business to those with an eye toward sustainability, because those are the companies that will be around in the future.
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