Energy Poverty, Green Energy and Blockchain
Imagine a world where everyone could be a reseller and a buyer of renewable energy and where the cost of the energy was automatically calculated based on the number of people in a neighbourhood producing and consuming electricity. A combination of Blockchain and new technologies which significantly reduce fabrication costs, and the massive adoption of mobile phones in developing countries makes this feasible.
Access to electricity is a fundamental human need, yet more than a billion people still have no access to it. In response, Bill Gates is leading a $1 billion (£800 million) fund along with Sir Richard Branson, Amazon founder Jeff Bezos and Alibaba's founder Jack Ma to invest in electricity based on green, i.e. non-fossil, sources. Gates believes that in the foreseeable future there will be a clean energy break-through that will save the planet by displacing polluting sources of electricity, and power the world. Access to affordable electricity can have a transformational impact on poor rural communities in a range of sectors including: education, economically important activities such as cottage industries and commerce, communications, access to national and international media and information, security, and, of course, recreation. In short, in the hyper-connected world of today, access to affordable electricity is critical.
The provision of access to affordable electricity through the introduction of off-grid renewable energy technologies, especially based on solar photovoltaic, has the potential to dramatically improve the lives people who lack access worldwide, including some 650 million in Sub-Saharan Africa, 350 million in Asia and about 20 million in Latin America and the Caribbean [International Energy Agency data, World Energy Outlook]. Blockchain can play a useful role in the process of introducing renewable technologies suited to the needs and capacity to pay of the rural poor by reducing transaction costs, increasing the transparency and traceability of customer payment data, and increasing trust between parties. Furthermore, the growing appeal of Blockchain and cryptocurrencies open the doors to autonomous market players and services to disrupt the entire energy market using a peer-to-peer (P2P) business model. Developing countries represent one of the most interesting use cases for decentralised energy through a peer-to-peer infrastructure and using new, low-cost renewable energies.
The price of solar panels has dropped over 80% over the last decade. In most countries, it is now cheaper to produce and buy solar energy than fossil energies. Solar panels can now be connected to the Blockchain to enable consumers in developing countries to benefit from distributed generation.
With Blockchain, someone from a village in a developing country can buy small solar panels and plug them to a mini grid network of cables to produce electricity for their local community. Another person from the same village can use their phone to buy electricity from the solar panel as a pay-as-you-go service.The provider of electricity to villagers can collect payment from the end user (and disconnect the solar unit in the event of a non-payment). The incentive of buying solar panels for people in remote areas is compelling, as they can immediately generate electricity and get paid instantly by the consumer. More and more people from the same village can buy solar panels and plug them into the Blockchain network. The smart contracts on the Blockchain allow participants in that system – consumers and producers – to buy and sell solar energy from each other, using digital tokens that can be redeemed for a local cryptocurrency. As the Blockchain is immutable and highly secured through a distributed infrastructure, this process is automated and cannot be corrupted by an individual or institution.
Clean energy tech start-ups are developing solutions and applications that focus on renewable energy, reducing carbon emissions and developing smart grids that will optimise energy consumption. Blockchain can assist these start-ups in offering a decentralised energy solution that is reliable and effective. As such, Blockchain has a significant chance to help combat climate change as it enables the creation, usage, and exchange of renewable decentralised energy in a trustworthy and reliable manner. This makes renewable energy more attractive to consumers, organisations, and societies.