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How energy works on the Blockchain and why entrepreneurs should pay attention

Most of us can not control where our power comes from, yet. But, with blockchain, that day is coming; and businesses will benefit from it.

November
7, 2018

5 minutes of reading

Opinions expressed by Business owner the contributors are theirs


The intergovernmental group on climate change of the UN has recently issued a stern warning: Ending the dependence of humanity on fossil fuels within a decade or becoming directly responsible for not stopping irreversible climate change.

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Clearly we must pay attention to climate change. And, here, one of the biggest areas we can change is the energy sector; this is because, currently, 33% of the world power comes from oil, while coal is responsible for 28% and natural gas for 24%. Cutting fossil fuels and moving to cleaner, renewable energy sources could do a lot to influence climate change, but we might have to rethink some parts of our electricity grid.

Power grids in industrialized countries have been developed to transmit a constant flow of electricity to as many people as possible and provide a steady stream of energy in the most reliable way possible. Although this was certainly a noble cause, the architects of this system did not take into account the fact that such ease of use would have led to an ever-increasing demand for energy, which in turn would have led to the release of tons of anhydride. carbon in the atmosphere every year.

In the United States alone, 35% of CO2 emissions come from energy production.

Now we know better, but doing better does not seem easy. Today, decades after scientists have launched the first signs of climate change, alternatives to coal and oil are still expensive and have poor adoption rates. All over the world, only 3% of our energy comes from renewable sources, 7% from hydropower and a measly 0.2% from solar energy.

Solar adoption is increasing, but it can be prohibitive for many people. Only a few solar panels can power an entire home or office, and 1 gigawatt of solar energy can prevent 690 tons of CO2 from entering the atmosphere. But even a standard system for a small house can cost an average of $ 13,188, while a system for a large home can be over $ 20,000.

And even at those prices, there are complications and regulatory obstacles that can make cost savings negligible, further discouraging adoption.

What Europe is doing to strengthen the positive impact of the blockchain on the environment

Already in Europe, there are more villages in the Netherlands where blockchain technology is used to generate, share and store renewable energy between houses, each of which has different combinations of energy production technology. Residents have solar panels, heat pumps and more and are governed independently of the main power grid.

So far, these power cooperatives are able to produce about 90% of the power needed by residents, drastically reducing their dependence on fossil fuels.

Also in Europe, Eurelectric, the commercial association of electricity distribution operators for the continent, has monitored the progress of the blockchain in the modernization of the electricity grid and has recently published a report on its results. The report concluded that ownership of the power grid properties would remain an important task, and that blockchain technology would probably not change this aspect of the business model of power companies.

What a blockchain could do

Blockchain could, however, influence the generation side of the energy distribution.

In fact, in 2017, a pilot program was launched using the blockchain framework of IBM to stabilize the electricity grid in Europe, a first step to incorporate renewable and clean energy solutions into the electricity grid. One of the main problems with the implementation of new sources of energy generation is that they can be unpredictable in the volume of energy they will produce on a given day.

This means that on a cloudy day, an electricity grid should be able to switch from solar to alternative source or back-up battery. It is here that the smart grid blockchains are useful on existing "stupid" electricity distribution networks: the smart grid is able to establish when there is a shortage in one part and to change sources without the need for constant human intervention .

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In the underdeveloped areas of the world, blockchain smart grids can be used to solve the problem of the last mile in the adoption of universal power, extracting energy from several nearby sources. It can also give people the power to choose where their energy comes from. Users of intelligent energy distribution networks can choose the amount of energy needed to obtain from renewable sources based on market availability, cost, reliability and other factors.

This is an alternative to simply relying on energy distribution operators to sell them regardless of what these operators are generating. Smart grids can also help people make more efficient use of their resources by providing for energy needs and storage utilization.

Want to learn more about the potential of blockchain smart power grid technology to advance your business? Take a look at this Lition infographic:

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