Blockchain and sustainability, a priori two concepts distanced by their very nature, and more hand in hand than ever today. We have approached the GLOBAL SUMMIT ON BLOCKCHAIN TECHNOLOGY IN THEENERGY SECTOR, where we have learned about the latest developments in Blockchain and sustainability applied to the energy sector. In this post we summarize some of the most basic points of this revolutionary change in the sector.
The energy market has hardly undergone variations throughout its history. There have been innovations and improvements, but no disruptive change has been presented that would bring about a new environment in energy consumption. Although it seems that innovations are beginning to take place that allow us to consider a change in the model.
On the one hand, renewable energies and batteries allow a certain degree of energy independence.
In addition, the Internet of Things is based on the connection between devices, enabling data collection, communication and interconnection between agents.
And then there is Big Data and the possibility of working with and analyzing all the information generated in the environment.
All this union between new technologies, blockchain and sustainability allows us to think about a change in the model, an evolution towards new systems that allow greater energy independence of consumers and that energy reaches every corner of the planet.
What is the Blockchain?
Blockchain is a decentralized database technology to guarantee transparent and incorruptible exchange operations. Among its first uses was to guarantee Bitcoin exchanges between users, and it has ended up finding multiple applications in other fields such as finance or energy, mainly because it provides transparency, security and immutability to the operations carried out with this technology as it is a neutral database that helps to reach a consensus between market agents.
Any transaction that is carried out is registered without the possibility of modifying or deleting it, providing greater transparency to any process and may even have legal validity as a notary in some countries.
Possibilities of blockchain in the sustainability of the energy market.
Transparency
It brings greater transparency to all processes related to energy, blockchain and sustainability within an organization, thus facilitating interdepartmental communication.
Decentralized models
It will encourage a shift from centralized to decentralized models, where consumers can also be producers and exchange energy resources in local environments where energy is produced near or at the same points of consumption.
Accessibility
It allows bringing electricity to places with difficult access. They do not have previous infrastructures, and can be those small economies self-sufficient energetically buying and selling through Blockchain energy among the neighbors of the community.
Energy infrastructure and sustainability
The infrastructure of the current energy ecosystem is focused on a centralized model on which the energy industry has always been based, connecting generation and consumption points in a unidirectional way. The latest innovations in this sector have raised new possibilities, focused on a bidirectional flow, a more local consumption, a more collaborative economy that encourages the exchange of energy between individuals who are producers and consumers (prosumer in its English terminology). Therefore, for this model, an almost complete change of infrastructure would be required, which in the short term makes it difficult to implement.
One use case would be to propose decentralized energy management models, operating by microgrids, so that agents consume energy that has been generated within a short distance or that they have generated themselves. Incentivizing the generation of wealth at the local level, so that electricity generating points can be established near urban centers. The next step in decentralization would be for each consumer to be at the same time a producer of energy, being able to sell stored energy to others who do not cover their demand with their own production.
Blockchain regulation
Blockchain regulation and sustainability will play an important role in all of this, as adaptations to this new environment will be necessary in order not to pose a problem in the progress, since, for example, some projects that have been carried out have had to look for alternatives in order not to breach regulations, such as not being allowed to sell or buy electricity directly between individuals, creating a token method to value the energy exchange.
The European Union is preparing a directive on self-consumption that is expected to come into force in 2021, changing the legal framework for electricity, which will allow greater progress in this area than with the current limitations. The aim is to seek greater flexibility and efficiency in cities and smart grids thanks to fluid communication between individuals.
Blockchain not only affects market regulation, for example, the right to be forgotten of users on the network, and the immutability of the Blockchain, could come into conflict, since everything that is recorded in this technology cannot be deleted.
Benefits of linking blockchain and sustainability
- Creation of more sustainable models that help eliminate energy poverty.
- Elimination of intermediaries in the processes.
- Reduction of emissions by encouraging the generation of renewable energy.
- Sustainability energy management and the Blockchain
Tools such as Smarkia s platform will allow to value the union of blockchain and sustainability, as it has multiple applications beyond distributed energy generation. Solutions for energy service companies, utilities or regulation, are some of the fields in which we are already working to continue being the reference platform in energy management.
Do you want to know if at Smarkia we apply the Blockchain?
