Blockchain for Cleaner Energy
April 21, 2018
Energy key to growth. Energy contributes to a better quality of life.
To those that have it, modern energy unlocks access to improved healthcare, improved education, improved economic opportunities and, even longer life. To those that don’t, it is a major constraint on their social and economic development.
The current state on clean energy is one that is centralized in its distribution and is largely controlled by government, which has limited the growth and investment in this sector. Currently the old carbon based methods have been applied to clean energy, especially when we look at energy grids. Historically grids were built because energy was generated through pollution causing power plants. Due to the pollution from these plants we have needed to build them far from our homes because it is not desirable to live next to a coal or nuclear plant. The distance to transmit energy from power plants to our homes results in a 5% energy loss due to the distance.
Renewable energy in contrast evokes an image of each home having their own solar panels, heat pump or wind turbine creating enough energy for themselves and being off grid. However it have been shown that having a completely off the grid homes are not completely feasible either and require a diesel generator. Having a city of completely off grid homes may not be feasible but having a city that produces its own energy at the source, along a micro grid system is one that is much more likely. Originally grids were built to function as a one way street: they transport massive amounts of energy from the producer to your home. Utilities send someone to your home once a year to look at your meter and then they send you the bill.
When looking at the idea decentralized energy which can sell and buy energy from the grid we see a new problem: how do we manage the payments and who sets the price? Currently small green energy producers deal with the issue that the price of energy is extremely volatile due to meddling by legislators as well as by the utilities themselves. The other issue small green energy producers face is the need to be audited and certified their energy is green in order to sell this. This process is time consuming and expensive and discriminates against small green energy producers exposing them to higher levels of risk than bigger players. What if we could reduce the cost of certification, eliminate onerous auditing and avoid non-market price controls, so even small-scale green generator could de-risk investments?
This is exactly what we see Quantaloop and blockchain providing for this sector. Quanta will be able to store generation certificates that are created by tamper-proof meters attached to solar panels. It will also store transaction records when certificates are traded so that the same unit of generation cannot be resold. By eliminating auditors, transactions costs and price regulation, this solution makes renewable energy investment possible for small players, giving an opportunity for decentralized power, sparking a flurry on investment in green energy. Quantaloop will be able to handle the multitude of transactions that other blockchain platforms are not currently able to handle ie: Bitcoin only being able to process 10 transactions a second.