Hitting The Solar Energy Sweet Spot With Blockchain & Cryptocurrency (#CleanTechnica Interview Part 2)
Talk is growing about a new wave of solar development powered by blockchain and cryptocurrency, so file this one under U for You ain’t seen nothing yet. After all, a new revolution in the history of energy is well under way, and yet energy transactions are still lumbering along on the same monetary platforms that powered the soon-to-be bygone era of fossil fuels. Now just imagine how quickly the renewable energy transition could accelerate when you throw in a bit of 21st century software.
If you’re new to the blockchain-crypto-solar connection, no worries! Last week CleanTechnica sat down for an interview with the blockchain-crypto-solar startup Power Ledger,* and the company’s Chairman and co-founder Dr. Jemma Green breaks it all down.
How Blockchain Fits Into The Solar Energy Picture
Following comments edited for clarity and flow.
CleanTechnica: What is a major obstacle for accelerating solar development, and how does Power Ledger solve the problem?
Dr. Green: I didn’t know much about blockchain in the beginning. I was doing applied research for my PhD. in electricity market disruption. I designed a rooftop solar array for an apartment building, but there was no economic incentive to have one installed.
I needed software to be able to allocate energy to each unit, and enable tenants to trade their allocation if they’re not home.
The solution came together when I was introduced to people in the blockchain community. I was introduced to Dave Martin [who is Power Ledger’s co-founder and Managing Director], and he was saw a problem with too many distributed energy resources — like rooftop solar — on the grid. If too many people go off the grid, those who are still on the grid will have to pay higher rates.
So here we are in 2017 and the price of solar is competitive, but some people will still be paying more.
The solution is to create a proper marketplace. Blockchain enables that by enabling peer-to-peer trading.
Wait — What Is Blockchain Again?
CleanTechnica: How much do people need to know about blockchain if they want to participate in this system? And where does cryptocurrency come in?
Dr. Green: Blockchain is a common record keeping system. Traditionally, buyers and sellers each keep their own books. With blockchain, they both have access to the same book.
The software connects to smart meters, and each payment goes into that record. It enables a direct connection showing how much electricity is used, by whom, when, and where.
Blockchain literally means blocks of data linked together, but if you prefer another description, “data lake” is suitable.
There is no consumer interaction with the cryptocurrency on a technical level. Customers need Sparkz (cryptocurrency pegged to local currency) to buy electricity, and utilities need POWR tokens to acquire and sell it.
Note: For more details check out this quick Power Ledger explainer, and for even more details check out the full Sparkz and POWR rundown).
Is This Really Happening?
CleanTechnica: What are the next steps for Power Ledger?
Dr. Green: Our mission is to democratize power. We’ve made a lot of headway in our first two years.
Among our projects are a peer-to-peer trading project at Northwestern University. We also have a virtual power plant project with KEPCO in Japan. This one will focus on frequency control and other grid services.
In Australia, we have a Smart Cities project involving 50 homes, a grid connected battery, an EV fast charger — and a Tesla.
In Thailand we have several sites for peer-to-peer trading including a mall, a dental hospital, a school, and apartment buildings.
The petrodollar has been the default currency for so many years, and now electricity is becoming more of an indicator of economic activity.
More And Better Solar Power
Well, that’s the end of the interview. All this — and several additional projects, too — was taking place before Power Ledger nailed down first prize in Sir Richard Branson’s Extreme Tech Challenge earlier this month, so it will be interesting to see how the company fares with that prize under its belt.
This is just the tip of the iceberg when it comes to the impact of blockchain and cryptocurrency in accelerating the clean energy transition, btw.
Not for nothing, but guess who else is getting into the blockchain-crypto-solar connection? Three guesses!
Okay, so it’s the US Department of Energy. The agency’s National Renewable Energy Laboratory was established just over 40 years ago in the heyday of coal power, petrodollar geopolitics, and centralized grids. Here’s what the lab has to say about software that enables 21st century energy development through peer-to-peer transactions:
Blockchain technology is an innovative solution to managing grid security, enabling distributed energy markets, and the proliferation of distributed energy resources while opening new value streams for customers and utilities.
Sweet! If you caught that thing about distributed energy resources, they don’t mean coal. Think rooftop PV and anything else that doesn’t involve a large scale central power plant, and you’re on the right track.
Last June, NREL demonstrated a real time, peer-to-peer solar energy sharing system on two homes and came away satisfied, so look for more activity from that quarter.
Here’s another snippet of insight from NREL:
Current energy markets lack an effective market interface for distributed energy resources, leading to reduced opportunities for vendors/manufacturers and the under utilization of assets. Blockchain technology offers a compelling framework for new market systems built around this emerging asset class.
And another, which reflects Power Ledger’s focus on providing for more equitable utility rates that reflect the low cost of solar:
The emergence of such markets will enhance customer choice, and it will motivate an ecosystem of new products and services that will stand to mutually benefit grid operators, utilities, regulators, ratepayers, and technology providers.
Okay, that’s enough. Speaking of coal, we’re wondering when the Department of Defense — an early and enthusiastic adopter of solar energy — will get into the game, so stay tuned for more on that.
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Image (cropped): via NREL.
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