Invest In a Green Planet, Invest In Blockchain Technology
By: Lucien Lecarme
Tags: Blockchain, Economics, Investing, Sustainability, Cryptocurrency

Blockchain & the energy market

Blockchain will naturally create environmental benefits by ensuring the significant reduction of corruption in government and its collusion with the financial and energy industries

James Wallace, Co-Founder, Exponential University

I live in Spain, the country of sun. In Ibiza we have 300 days of sun. You would expect solar panels everywhere. Well, in the more northern countries like Germany and Sweden, many more solar panels can be found. Consumers are incentivized to put excess energy back on the grid. There is even a subsidy for using solar panels.

Not in Spain. At least not from 2015 to 2018, the former Rajoy government, at the demand of the Populist party PP, implemented a very controversial sun Tax. The former Spanish government made you pay to put your surplus energy back on the grid. Also, you were only allowed to use up to a certain percentage of green energy. When you went above this, it was heavily taxed and you risked a huge fine. This insane situation had probably 3 reasons;

It is actually expensive to redistribute energy on a grid. Because of the high price of energy storage. This is the energy storage problem. Elon Musk has yet not invented a super battery which production is cheaper than the energy that is saved using it. It is expensive to transfer energy on a grid. The energy infrastructure has to change first. To use the grid, people have to pay for it. The more efficient the grid, the cheaper using it gets. Spain hasn’t innovated its grid much lately. The energy cartel is still in favour of fossil fuels, also in Spain, and they have a strong oil lobby in politics. They even tried planning an oil rig only 30 KM away from Ibiza’s more than 60 pristine blue beaches. This is how crazy this world has got and how money and oil can blur the view of some people.

In all of the above, Blockchain technology can help.

When consumers produce something out of their consumption, this is called prosumption. An example is people putting surplus energy from Solar panels back on the grid. Blockchain technology can bring its core quality in this economic field of people producing value, in this case, electricity, and trading this peer to peer.

It can bring accounting (how much energy is created?), tracking and bringing 2 parties together (where can it be sold to, what household needs energy and how much?), and paying for it with. Energy tokens that represent the value can be paid through a secure system of crypto-wallets. This would make this market very appealing, and the costs saved by cutting away the conventional energy companies can be used to invest in alternative grids.

This peer to peer possible borderless trading of energy can be called a microeconomic movement that disrupts and innovates the macroeconomic energy structure bottom-up.

When the sun shines all day in Ibiza, but Valencia is clouded, I potentially can sell energy to households in Valencia. In this blockchain-powered prosumption system, “smart meters could be used to account and register the micro-generated energy on a distributed ledger” (page 76; Distributed Ledger Technology: beyond block chain. Published by the UK Government Chief Scientific Adviser)

Another option would be that my surplus energy becomes solar tokens. Instead of mining Bitcoins, people can earn Solar Tokens as a reward for generating solar energy. This model, in essence, can be applied to the creation of all sorts of sustainable energy. The conditions for these project to work are that the technology needs to work, enough people start using it or buy the coin and there is a smart distribution network of the created energy.

Or what about this one;

Hydropowered Bitcoin mining facilities in the Swiss Alps could purchase carbon credits. In this way, the relatively high carbon footprint of Bitcoin mining can pay for its emission. Since we don’t know the real value of Bitcoin for society, at the long run, it is difficult to judge its high energy cost for mining at this stage of our Blockchain and Bitcoin revolution.

I believe the energy-saving prospects of Blockchain technology as explained in these examples, how futuristic they might sound, will far outrun the initial investments needed to be done.