Up and Coming

Blockchain in renewables

The global need for energy is predicted to double by 2035 and the world needs innovative ideas for energy generation, distribution and financing to meet this demand. One of the most awaited tech innovations in the renewable energy space is blockchain. The industry is expecting that small, regional power producers will find it easier and cheaper to provide renewable energy thanks to the latest breakthroughs in blockchain-supported software and hardware. For example, a safe network of self-generated energy that allows communities to share access to power generated from renewable sources is being made easier to control by a Germany-based company, OLI. The OLI box, a product conceptualised by the German company, captures and optimises the use of electricity and heat, making it easier to share energy generated from solar or wind. Globally, there are several companies that are exploring the use of blockchain, not just for providing renewable energy to end users but also for managing renewable energy grids. An example is the Alternative Resource Group (ARG).

Blockchain’s ability to allow peer-to-peer energy transactions could also significantly disrupt the energy sector, particularly by encouraging decentralisation. The growing use of small renewable energy installations, such as rooftop solar panels, can create stress on electricity grids that were designed with large, centralised power plants in mind. By allowing peer-to-peer energy trading and incentivising local consumption at the time of production, blockchain could stabilise the grid, aiding this decentralisation. Pilot projects for community energy and peer-to-peer have already been successfully run by companies such as Brooklyn Microgrid in New York, Power Ledger in Australia and Conjoule in Germany. Blockchain could also be used for electricity tracking for the purpose of providing rewards for renewable energy generation  (SolarCoin is one company that does this) and renewable energy certificates/ carbon credits.

A look at the blockchain-based products and services provided by ARG and Power Ledger…

Alternative Resource Group: Latin America-based ARG provides innovative solutions in areas such as electricity generation, energy storage, micro-grids, self-sustained renewable generation, and blockchain and digital ledger technologies. The company specialises in full-cycle development of energy infrastructure – from strategic siting, design, engineering and entitlements to financing, construction and operations and management. It develops a comprehensive plan for optimal energy generation, storage and distribution. It has recently started developing mechanisms for the utilisation of blockchain and digital ledger technologies in grid security, grid visibility, energy trading, and other applications. The company is developing a secure power smart grid system built on an advanced blockchain backbone and digital ledger technology. The systems deliver low-cost renewable energy with backup systems for natural gas cogeneration and advanced battery storage.

Power Ledger: Power Ledger uses blockchain technology to enable households and buildings to trade excess solar power, peer to peer, to make power more distributed and sustainable. The Power Ledger system tracks the generation and consumption of all trading participants and settles energy trades on predetermined terms in near-real time. Power Ledger is one of the most successful Australian ICOs to date. In 2018, the company launched its first commercial deployment in the US. It is now in the process of extending its mission to allow individuals and communities to share the profits of renewable energy assets by trading in a crypto token that it soon plans to launch. Power Ledger is acquiring energy assets to make the token asset backed. This Asset Germination Event (AGE) token has the potential to disrupt the traditionally centralised energy market and thus grow the renewable energy industry, because ownership of the token will incentivise people to invest in renewable energy.

The token will be attached to energy from assets like solar and wind farms and community-owned batteries. Power Ledger’s AGE token aims to increase the amount of capital flowing towards renewable energy by allowing an investor class previously denied the opportunity to participate in many projects of this nature as they were not “sophisticated investors”. Most of these products are currently available only to sophisticated investors who are able to invest in large-scale energy projects, and not to retail investors. According to Power Ledger, the asset-backed token will pay out distributions from renewable energy generation, unlike a utility token whose value corresponds to its future use.  To ensure their token is asset backed, Power Ledger says it is acquiring its first set of assets – a grid-connected battery and a commercial solar system – and will then issue tokens that pay distributions from the energy

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