Blockchain, in particular Bitcoin, is well known within the energy industry for having an enormous power demand, mostly fed by dirty coal-fired power of China. This stigma, however, is correct but doesn’t say anything about the technology per se. Every single revolution of the past as well as in the future has and will require excessive amounts of energy, as any sort of movement depends on energy triggers to take place. The entire, worldwide, Bitcoin network currently consumes as much power as a state like Syria, and one Bitcoin transaction needs the CO2 equivalent of 679,430 Visa Credit Card transactions.
Admittedly, although the Blockchain transaction process is still very energy-intense, caused by a system, chosen by the people, to dispose of their money within an unhackable peer-to-peer network independently and decentralized. Bitcoin is a product of free-market economy and therefore gained authority by the people. Nevertheless, power consumption is a topic that Bitcoin miners already face by installing massive renewable energy Bitcoin farms in Iceland, for example.
Looking beyond the horizon of energy consumption and constitution by grasping the use-cases of Blockchain technology, one will recognize some remarkable and promising developments within the Energy and Blockchain sector:
Solarcoin – a solar generation incentive
One of the most exciting use-cases of Blockchain within the renewable energy industry is Solarcoin. For every generated MWh from a solar installation, you receive one Solarcoin for free. This process can be monitored via your SCADA, i.e. SMA’s Sunnyportal and claimed by creating a Solarcoin wallet. It doesn’t matter how big your installation is, residential and commercial owners both are eligible to claim their Solarcoin. This project is free and serves its main objective to incentivize the generation of solar power. One Solarcoin is worth approx. 0.02$ at the moment.
In terms of revenue, a 1 MWp solar farm in Central Europe could generate an extra 20$ on its annual output of roughly 1,000 MWh. Considering the price peak of Solarcoin in 2018 of approximately 2.40$/coin, it could potentially provide an extra 2400$ in revenue, sold at the right time.
Prosumers – connected via Peer-to-Peer Energy Transactions
Numerous emerging projects on solving the complex transactions of prosumers feeding power into the grid are founded based on blockchain technology. Selling excess energy to a neighbour, by using the Blockchain and smart meter values, is a way forward to create autonomous towns and smart-cities. NREL is currently running such a project called ‘foresee’. They estimate the full adoption and functionality will take another five to ten years to enable local energy trading on the Blockchain without disturbing the primary power grid. The major task is to link producers and consumers with each other in realtime and full trust, without knowing the counterpart. Blockchain provides those requirements as one of its primary attributes. NREL is running the experiment on two homes linked to each other, communicating and monitoring data in realtime. Whenever it is cheaper to buy power from each other, instead of the bulk grid, the transaction is completed by using an Ethereum based cryptocurrency. Consequently, the linking of several households nearby would form mini-grids to exist apart from the bulk network, independently.
Such mini-grids anticipate forecasted energy demand and generation combined with available storage facilities like plugged-in BEV and ordinary storage facilities via AI. As a result, it can even be possible to establish autonomous small towns by trading power based on Blockchain and AI, ultimately building independent grid islands.
Smart Contracts and IoT based power wholesale
Another Ethereum based blockchain use-case is the wholesale power grid distribution revolution. Ethereum’s smart contracts allow consumers to be connected directly to the grid, instead of a wholesale electricity company, by using Blockchain compatible meters and IoT in combination with Ethereum. Electricity wholesale companies only own the metering devices of the grid infrastructure and take care of the meter monitoring and accounting. Those tasks can be managed by Ethereum easily and can potentially cut electricity bills by 40%.
The use-cases mentioned above are just a few of many more, showcasing the potential of Blockchain revolutionizing the energy market in about 5 – 10 years, again. Renewable Energy, Smart Metering, Prosumers, etc. have laid a base for the energy market to be flexible and adaptable, which is a useful attribute for taking the next step towards digitalization and adopting to Blockchains countless improvements.
Do you see yourself using any of the above technologies soon? Why or why not?