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Since Thomas Edison has activated the switch the world's first permanent power plant in 1882, energy flowed in a single direction: from large-scale centralized generators to homes and businesses.
For a long time, this hub model made more sense. Big cities consume a lot of energy, and it is much cheaper to invest in a single, powerful centralized utility. Edison's centralized system was cheap, effective, and convenient. But things have changed and a new decentralized system has already begun to revolutionize the energy sector.
Because decentralized power is now possible
Today, in light of new report by the United States government on climate change and its impacts, there was more emphasis than ever on new renewable energy technologies such as solar roof panels, wind turbines and battery storage at affordable prices. This shift towards distributed energy has made it possible for energy consumers to become producers themselves. These prosumer they are able to meet their energy needs and even produce a surplus, which they can then reintroduce on the market.
As in any market revolution, however, this new model comes with numerous logistical and political calculations. It is natural to ask how this will affect the prices of energy. And, more importantly, how can prosumer distribute all that energy without a centralized network?
This is where peer-to-peer trading comes into play.
Peer-to-peer power: your electric bill meets Airbnb
Peer-to-peer energy trading allows distributed producers to sell the energy they generate to other consumers. Just as with accommodation (for example, Airbnb), cars (eg Turo) and financial loans (for example, the Loan Club), individuals earn a market share when they find themselves with a surplus.
But there are still some problems with this decentralized, peer-to-peer energy model. For example, how do you manage, registers and make transparent an automated and decentralized energy and consumption system?
As in the case of the financial sector, the answer is blockchain, the distributed safe register method of tracking and authentication of peer-to-peer transactions.
Blockchain and market efficiency
We all know about the blockchain that fuels the development of cryptocurrencies like Bitcoin. Elefund& # 39; S Serik Kaldykulov, a VC investor in Robin Hood, summarizes one of its universal advantages: "With its decentralized public book, blockchain helps push markets closer to an ideal of efficiency".
This "ideal of efficiency" is coming in the energy sector.
Blockchain is proving to be a huge benefit to the energy industry, where there are tests, pilot projects and start-up companies working to blockchain cards in the peer-to-peer trading market. As outlined in a piece of HuffPostThe strength of the blockchain lies in its ability to facilitate smart contracts among energy traders and make transaction data more transparent than ever before.
Companies like Power Ledger, WEPOWER, is LO3 energy they are already using blockchain to interrupt the energy sector. These companies are launching blockchain-enabled projects around the world, including microgrid applications, electric vehicle charging (EV) and peer-to-peer transactions. These solutions will help solve the new contractual, commercial, transactional and data management problems that arise in this nascent distributed energy industry.
Come old, come new
In the midst of this energy revolution, traditional utilities are not going away. In fact, some are eager to participate in this new shift to decentralization. For example, Tokyo Electric Power Co. has recently established a solar and storage unit powered by call blockchain Trende attract these decentralized power brokers and reverse the decline of the industry.
"Blockchain should not undermine startups against utilities or suppliers against consumers and prosumers," he says energy research analyst Johnathon de Villier. "Indeed, blockchain is one of the only technologies with the potential to support a platform that aligns the incentives of various stakeholders in the energy system."
This is what makes decentralization of blockchain-based energy so universally appealing. In particular, 66% of corporate executives expect that their company's role will begin to integrate distributed energy resources, according to an Accenture report.
Consumer participants will save money. In addition, commercial networks will promote greater transparency, leading to more efficient pricing across the energy sector. In turn, these new technologies will accelerate the demand for renewable energy, thus reducing the cost of energy for all. The result is a virtuous cycle, made possible by blockchain technology.
Steve Westly he is the former State Comptroller and Chief Fiscal Officer of the State of California and founder of the Westly Group, one of the largest venture capitalized companies in the United States. Follow him on Twitter @stevewestly.
Philip Levinson is Vice President of Marketing at Edcast, the SaaS company financed by Softbank with financial clients including ANZ Bank and ING Bank and public sector clients including India NASSCOM and the World Economic Forum. His last article for BraveNewCoin was 2 Big Ways Blockchain is changing health care. Follow him on Twitter @plevinson.
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