Blockchain is a term most commonly associated with cryptocurrency mining, but there is more to it than creating virtual money. How is blockchain working to support renewable energy, and how could this technology reshape the way we look at sustainable power generation moving forward?
What Is Blockchain?
First, for those unfamiliar with the technology, what exactly is blockchain?
Blockchain, at its most basic, is a decentralized record, or ledger, that allows multiple parties to track transactions and assets as they do business. These networks are supported by every computer that interacts with them. The lack of a centralized database makes the information more accessible and reduces the risk that something could damage the data.
The other main aspect that defines blockchain is the fact the data, once entered, can’t be changed. This improves information security while providing additional transparency for anyone monitoring the state of the blockchain. Crypto mining has its basis in blockchain tech.
So what does this have to do with renewable energy?
Certifying Green Energy Sources
In an effort to reduce the global carbon footprint and curb the impact of the looming climate crisis, countries around the globe are turning to renewable energy but that change is only effective if companies aren’t cutting corners and are entirely honest about the energy they produce and the way they create it.
A solar energy system, for example, might look more appealing if it offers the same sort of steady power generation every single day. But since it relies on the weather and how much direct sunlight each panel’s photovoltaic (PV) cells receive each day, there will be some variability.
The immutability of blockchain, paired with its integrated transparency, means renewable energy companies that utilize this technology can’t cut corners or hide secret fossil fuel plants in the darkest corners of their operation. Certifying renewable energy production becomes as easy as looking at the blockchain.
Right now, only about 2% of the world’s power generation comes from solar, but this number will have to rise as countries move away from plants that burn fossil fuels.
Creating a Digital Power Grid
Blockchain isn’t just for keeping track of power generation. Its widespread use means it can also be a tool for making power generation more accessible to the masses.
In most of the world, individuals have little to no choice when it comes to what company powers their home, or the kind of energy generation they use. That’s why WePower, a renewable energy startup out of Estonia, has been using blockchain to create a choice-driven energy market.
Energy providers use blockchain to share their energy data in real-time with consumers. Those consumers are provided with credits that they use to purchase energy services, depending on variables like price and availability. Estonia is a relatively small country that already possessed a fully digital power grid, which made it easy for WePower to implement its blockchain system.
This would be more challenging to implement in larger countries, or those that haven’t yet adopted a digital power grid, but the success of this program in Estonia shows that blockchain has enormous potential to shape the power industry and renewable energy generation moving forward.
Building a Renewable Future
If we hope to avert the looming climate crisis that could make life on this planet difficult, then it is important to start looking at renewable energy as a necessity rather than an option. Blockchain might be synonymous with cryptocurrency, but it is proving its utility in many other industries and will continue to grow and thrive in the years to come as we work to build a renewable future.
