Blockchain can pave the way for fair pricing and competition of clean energy sources in smart grids and give consumers the right to choose.
Blockchain is often touted as the next technological revolution that is set to impact everything from online transactions to e-government. But perhaps the question of many activists of clean energy industries. And environmental activists is what will be the achievement of this technology for renewable energy.
Blockchain is basically an online ledger that stores information securely and makes it available to everyone in the form of an immutable source of information.
This technology is not controlled by a particular entity, but is distributed among a large number of computers and uses a specific and secure format to record data; So that the information cannot be changed or distorted by other people. Using methods such as data decentralization and protecting them against manipulation has facilitated transparency and information exchange in the blockchain. Thus, this particular method of data recording has provided a great capacity to shape the new wave of technology. And the ability to interact with it.
Blockchain has also been able to create a platform for the supply and spread of digital currency. Which in recent years has been very popular compared to common currencies.
Although these two technologies emerged almost at the same time, blockchain is much more than a simple platform for offering cryptocurrencies.
In recent years, the process of mining cryptocurrencies with high consumption of network energy has intensified the upward trend of carbon emissions. However, blockchain technology is an emerging field that can create new innovations in the renewable energy industry. Today, many startup as well as large companies are trying to take advantage of the high capacity of blockchain to accelerate the transition to clean energy.
Consumer-based smart networks
Many startups are trying to use blockchain as a tool to develop accessible and sustainable energy networks by promoting methods of instant data sharing.
The idea behind the creation of blockchain-based energy networks is relatively simple:
“As long as consumers have complete control over how to supply their energy, as well as complete information based on how it is produced, it will be possible to compete effectively and promote sustainable energy.”
Using a blockchain-based smart grid, consumers will be able to better compare their energy suppliers and purchase directly from them. In Estonia, a blockchain-based smart grid called WePower has been piloted, which is actually a kind of customer-choice energy market that operates based on data provided by a set of energy producers. With the help of how to manage of this program, consumers can enjoy more freedom of action in choosing their energy supply source (according to the exact requirements of instantaneous production and its price).
Estonia’s fully digital electricity grid has provided an opportunity to promote renewable resources while testing its blockchain project. Nick Martiniak, CEO of WePower says:
Blockchain provides the necessary trust to share data and creates fluidity as well as accountability between energy buyers and producers.
If the blockchain network becomes widespread in the world, it could launch a whole new market for clean energy. As Martiniak says, even if the cost of renewable energy drops significantly, small and medium-sized companies still won’t have a smooth path to start buying clean energy without this technology.
An opportunity for clean energy
A smart energy grid that gives consumers more transparent choices can drive the market toward greater integration with clean energy sources.
Cheaper energy sources such as renewables are the preferred choice of the market. This can help to introduce clean energy as a mainstream option.
A typical example from India can partially explain how blockchain-based power grids work:
“In the event of an outage in the main power grid, a local biomass power plant in a rural area owned by a farmer can start acting as a backup source. It is slow to inject energy into the network and the proposed price for buying this energy can be defined as a floating amount according to the status of other sources in the network.
“If this blackout occurs during the day, many solar (photovoltaic) plants will also be able to cover the needs of consumers, however, during the night, biomass plant operators will have a better opportunity to sell their electricity at a higher price.”
All these market dynamics of supply and demand can be automatically covered by a blockchain smart contract.
Decentralization of energy systems will help the process of democratizing information and empowering people to make better decisions. Blockchain-based smart grids as a powerful tool can help reduce inequality and provide cheaper and cleaner energy in all areas.
both developed power grids and energy-deprived areas. Therefore, blockchain can be one of the most important solutions to reduce carbon emissions in the long term and contribute to sustainable development around the world.
However, to ensure the success of this solution, smart networks will need the cooperation of all people to share their information; A move that many companies and even private citizens have refused to do so far. Blockchain needs to create a common understanding among all people to become an efficient global tool. But until then, startups will continue to pioneer this technology and help small communities and developing countries reap the benefits of the clean energy revolution.