The explosion in renewable energy projects on blockchain is already promising—there are 122 startups operating in the space, with nearly half launching since 2017. More impressively, these startups have raised over $320 billion between the second quarter of 2017 and the first of 2018.
Electricity is undoubtedly one of the most vital utilities of any country around the world. Today’s societies rely heavily on electricity for almost all our needs and vital services, and a single outage could have a drastic impact. Case in point is the Northeast blackout of 2003, which shut down power across the eastern US seaboard and parts of Canada for 29 hours. Described as a “catastrophic outage”, the event is a grim reminder of how dependent the world is on this energy source.
Despite its essential position, the energy industry worldwide remains riddled with inefficiencies. From the use of fossil fuels and reliance on outdated generation methods to de facto monopolies and high costs, the sector is ripe for change. The clean energy industry has been growing, but it is blocked by obstacles that make it infeasible to scale, barriers from existing industry interests, and other factors that hold it back.
To combat some of these barriers, entrepreneurs have started looking at blockchain as a viable workaround to the existing impasse and change-resistant mentality. Now, the highly visible blockchain industry is gearing up to tackle renewable energy and bring the disruption necessary to really break it through into the mainstream.
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Clean Energy and the Resistance Factor
The clean and renewable energy push has continued unabated even in the face of strong resistance from corporate lobbying groups, resulting unfriendly government policies, and the technological barriers that still exist for the tools we use.
The capital cost of building new fully functional renewable energy plants is still far greater than traditional energy generation. In 2017, solar systems cost over $2,000 per kilowatt to install, while natural gas plants were significantly cheaper at $1,000 per kilowatt. Moreover, traditional power systems are still one-way roads—companies sell access to consumers who usually have no alternatives. Renewable energy threatens to change that model, and the energy industry has lobbied and campaigned heavily against it.
Overall, this results in a market for renewables that, while growing and constantly improving, remains bound. The industry has made significant progress, and even formerly staunch opponents like Exxon, BP, and Shell have announced plans to dip their toes into the renewable energy field. Even so, it remains far behind where it could be, and disruptors hope blockchain may be the jolt renewable energy needs.
Blockchain Provides a Boost
The explosion in renewable energy projects on blockchain is already promising—there are 122 startups operating in the space, with nearly half launching since 2017. More impressively, these startups have raised over $320 billion between the second quarter of 2017 and the first of 2018. These new projects also stem from other businesses and innovations that have been proven successful. For example, the Brooklyn Microgrid project, which created a small-scale community where users could generate and store power via solar panels, and trade with other community members.
Some blockchain startups have taken that model and scaled it to a much higher level. Eloncity, for instance, is building a similar architecture that removes the need for power companies by offering a storage, exchange, and usage network directly on blockchain. The company’s system uses smart energy storage batteries alongside solar panels to allow users to create, use, and store their own energy. More importantly, Eloncity’s marketplace allows users to completely circumvent power monopolies.
Others have focused exclusively on the marketplace aspect, such as Power Ledger, which lets users that already have solar panels installed sell their excess power at prices they set. Some focus on providing rewards for users to generate power. SolarCoin, one of the oldest blockchain energy projects, offers tokens to users who generate solar electricity in hopes of furthering adoption and usage. Some even go the investment route, such as NestEgg, which lets users invest in windmill farm projects and incentivizes growth in the sector.
These projects tackle various issues, but blockchain at its core also helps create more transparency in existing systems. For instance, managing existing systems—even solar-based—for energy distribution on blockchain means that there is less space for waste and fraud, as energy consumption and generation is tracked on an immutable ledger. Even monitoring efforts that help encourage greater green energy usage, like Swytch, provide a valuable tool for renewable energy efforts.
Decentralizing our Energy Future
These projects are still in their relative infancy and have yet to prove they will succeed. Regardless, blockchain offers a significant opportunity for a sector that is aggressively attempting to disrupt the status quo. Thanks to its decentralized nature, as well as its transparency and disintermediating potential, blockchain can provide the renewable energy sector with a valuable tool.
As more companies find creative uses for the technology, the broader market will also see the value in removing the barriers that have made energy—one of the most vital resources on earth—expensive and restricted.