Energy is power. That doesn’t sound like a very controversial statement, but if Solar Bankers gains momentum through its revolutionary use of blockchain, solar energy could disrupt the current infrastructure. Should power companies be concerned? That depends on just how disruptive Solar Bankers’ model becomes. And it could become very, very disruptive.
As it stands, utilities benefit a great deal from blockchain and cryptocurrencies like Bitcoin and Ether because mining consumes a lot of energy. The nature of the cryptocurrency means miners are continually adding new blocks to the chain. This process creates an ever-increasing demand for energy worldwide.
Bitcoin’s Energy Problem
Bitcoin alone consumes more energy than Bangladesh and is just below Israel on the energy consumption ladder. Because it’s a distributed system, Bitcoin’s energy consumption isn’t confined to a single data centre in a single country. Every miner is responsible for skyrocketing energy usage, and it’s incentivised worldwide. The more energy you use, the more Bitcoin you earn. This reinforces utility infrastructures worldwide and taxes grids so that energy companies have to generate more power. More often than not, the energy isn’t clean, it comes from fossil fuels and natural gas. The Guardian’s Alex Hern points out that Bitcoin uses as much CO2 per year as 1 million transatlantic flights.
It doesn’t make sense. A decentralized cryptocurrency network that relies on centralized energy markets? This goes against the decentralized spirit of Bitcoin and blockchain.
The Grid’s Cybersecurity Problem
There’s another problem: Vernon Trollinger, a writer who specializes in green energy and technology, points out that energy hackers hover like dragonflies. According to Trollinger, Part of modernizing the U.S. grid system involves updating and policing its computer network security to keep the bad guys from taking control. But in 2015 a Russian operation called Sandworm hacked into Ukraine’s grid and killed the electricity for a quarter million Ukrainians during the middle of winter.
Then Russia hacked the U.S. energy grid, indicating there’s weakness in our system as well. Cybersecurity firm Symantec reported that Moscow’s Dragonfly hacking group was able to infiltrate the core systems that control energy companies‘ operations.
Powered by dirty fuel and susceptible to hacks, the current energy system could clearly use a reboot.
The Potential for Disruption through Blockchain
Solar Bankers wants to facilitate the reboot by taking on the world’s energy giants with Suncoin. Suncoin is a crypto token that users earn by harvesting solar energy. The process starts with solar panels and any of the other solar tech Solar Bankers has on offer, an array of devices meant to maximize solar power intake. After the user harvests solar energy to power their home, the excess is stored in a micro-grid. A smart meter interacts with both the Skyledger blockchain and an app on the user’s phone.
The app tells the user how much excess solar energy they have available, and the Skyledger blockchain platform facilitates trade. With Suncoin crypto tokens the user can sell clean energy to others in the network, meaning people who don’t have solar panels could buy clean energy with Suncoins. Users can also potentially trade Suncoins for fiat currency and other cryptocurrencies. They can even buy additional solar energy-generating equipment or trade Suncoins for CO2 Emission Certificates.
It’s hard to overstress how revolutionary this is because it turns solar power into currency and cuts out the energy utility middleman.
The Solar Energy Market
Right now, the solar energy market works with utility companies through net metering agreements. When you create excess solar energy that doesn’t power your home, the utility company gives you a solar credit. The credit’s value is based entirely on the rates of each utility company in each state. So, if you generate an excess of 150 kWh (kilowatt-hours), you’ll see a discount on your next power bill that represents 150 kWh.
People with solar panels have to continue using utilities because there are times ” at night, or during periods of extended cloud cover ” when solar panels can’t directly power a home. During those times, excess solar energy from panels must be stored on the centralized grid, which is controlled by utility companies that contract with states.
Solar Bankers argues that this is an unfair agreement. Although solar energy producers receive credits, the value of those credits is based on what a utility company charges for fossil fuel energy. Fossil fuel energy doesn’t cost utilities much to create, but they sell it at an inflated price ” up to 30 percent more than it’s worth.
That extra 30 percent goes toward maintaining distribution infrastructure, and of course, when you buy electricity, you’re paying employee salaries. When you participate in net metering agreements, you’re also funding companies that still contribute a great deal to fossil fuel consumption, even though when you bought solar panels your intent was not to support the fossil fuel industry to being with.
But what about the fact that cryptocurrency mining is energy-intensive? How do Suncoin and the Skyledger platform correct for that? Skyledger doesn’t require mining. The only problems are hardware and scale.
The Challenge to Energy on Suncoin’s Blockchain
Community microgrids have to be installed with consent from cities and states, and a substantial number of people have to sign on and invest in the Skyledger blockchain for Suncoin to take off. For Skyledger to work, communities have to develop a mesh network of nodes ” computers, smartphones, tablets ” which facilitate the blockchain. For Suncoin to work, the Skyledger blockchain must be in place, and micro-grids must be operational. Furthermore, people have to invest in solar tech.
Like any other blockchain-based tech, Suncoin will require buy-in from a network of people willing to take the risk. Pushback will come from city and state governments and the utilities they contract with. Disrupting the energy sector is an uphill battle, but in the end, particularly if the cybersecurity of the centralized grid is in question, it could happen sooner than you’d think.
