Investing in Blockchain Can Yield Handsome Returns for The Renewable Energy Sector

We are in the midst of a technological transformation. Emerging technologies such as Artificial Intelligence, Machine Learning and Blockchain have permeated processes and operations across sectors. One sector that can potentially benefit significantly from technological integration is the energy sector. That is not to say that the sector has been unaffected by the rapid technological advancements. The introduction of smart meters and the shift towards a smart grid, is already underway. While technological innovations have brought down solar costs by as much as 80% and have led to the plummeting prices of battery storage as well. This augurs well for the renewable energy sector, and for the entire energy ecosystem as a whole.

However, the energy sector seeks to benefit immensely from using the relatively untapped potential of blockchain. A report by World Economic Survey suggests that 10 per cent of the world’s GDP could be stored on blockchain by 2027. This clearly highlights its vast potential. Blockchain functions as an online register that securely stores information and can be a repository of data, that can be accessed and utilized by everyone. This can have remarkable utility, as it can help decentralize energy systems, democratizing information and allowing individuals to make better-informed energy decisions. It can also provide a fillip to the renewable energy sector. How so? With proliferation of smart meters, that can also function as net meters and the sustained development of demand side response measures, new digital peer-to-peer platforms are coming up. We are also witnessing the emergence of renewable mini and micro grids. These are enabling the renewable power producers to connect directly with the consumers, providing them greater flexibility, convenience and an ability to make the shift towards green power. Blockchain-based renewable energy mini and microgrids can help consumers and communities manage their energy supply, according to their needs. These mini and micro grids can give the consumers total control on sourcing their energy and increase transparency, through information sharing.

Furthermore, integrating blockchain into the billing system can help enforce real-time differential pricing for consumption. Clearly, using blockchain can reduce power inequality and provide affordable and greener energy to power dark areas. It is also a viable avenue for the reduction of carbon footprint and emissions, by making access to renewable power increasingly convenient and seamless. It can also help consumers become an active stakeholder in the renewable sector as they can track their power usage real-time and sell surplus energy back to the grid. This is a significant incentive for consumers to adopt renewable mini and micro grids, while the added trust due to the transparency of the entire system can also propel a shift. Further incentivizing consumers, on the basis of their contribution to the grid can also yield handsome returns for the sector.

Thus, blockchain can potentially be the catalyst for clear energy proliferation, creating Decentralised energy systems and turning consumers into energy generators. The local government are cognizant of the immense potential of blockchain and are looking for avenues for its assimilation. One example that comes to the mind is that of Andhra Pradesh, that has announced a partnership with the Swedish firm ChromaWay to secure citizen data using and is also exploring blockchain use in areas like smart cities and transportation. However, its usage in the renewable sector is still in the fledgling state. What we need now is its adoption with speed and scale. The prerequisite for a decentralized renewable distribution network will be an open access ecosystem, using blockchain enabled smart meters. This would require concerted efforts by the government to bring the private players into the blockchain fold and give them the opportunity to provide the necessary infrastructure such as smart meters, mini grids, micro-grids and blockchain platforms for facilitating transactions. These players can then be micro aggregators for a community as they can connect all the local energy producers with the consumers over their blockchain platform. This would lead to increased competition, which will bring down prices and increase energy access.