Power Ledger: Fusing The Energy Industry With Blockchain Technology
Some forward-thinking groups are looking into renewable energy and energy trading to reduce the cost of electricity, lower the carbon footprint, and even lift poor nations into new levels of prosperity. Utilizing blockchain technology, this process can become a streamlined and universal concept in an unprecedented way – for both companies and consumers.
BLOCKCHAIN GOES GREEN
In August of 2016, Power Ledger, a Perth startup with a focus on decentralized energy, began implementing blockchain technology into their own demonstration projects. Beginning with trials in a retirement community located south of Perth in Busselton, the company tested home users’ ability to trade excess solar energy between neighboring homes. Through the installation of energy meters, fitted to twenty households and a communal clubhouse, Power Ledger was able to track a house’s actual energy usage over a course of eight weeks in real time.
According to Power Ledger’s co-founder Jemma Green:
Power Ledger’s blockchain is extremely energy efficient as it uses the latest high-security proof-of-stake mining and solar power, making it the world’s most eco-friendly and sustainable blockchain ideally suited to data intensive applications such as required for Power Ledger’s Peer to Peer trading and settlement platform.
Power Ledger is a project under Ledger Assets, a company specializing in global verification technology that utilizes the blockchain. This innovative technology “allows power meters to communicate directly with the blockchain, removing many hardware trust issues,” according to Green.
Since Proof of Stake mining requires more trust in people than Proof of Work does, this hybrid solution offers the best of both blockchain models within a single implementation.
A faster data block creation rate dynamically communicating with the stable and robust Bitcoin Blockchain (hence a hybrid) giving the blockchain a very high level of trust from the onset.
With the deployment of this technology scheduled for 2017 in cities like Victoria and Perth, Australia is gradually solidifying their advancing model for consumer generated and shared energy. With “almost 300 days of warm, bright sunshine per year” and the dropping costs of solar panels, the continent is in a unique position to lead the future revolution in how energy is created, swapped, and sold.
Current centralized grids that power homes and businesses around the world are expensive, inefficient, and generate pollution. According to the Energy Policy Research Institute, power outages alone cost the US economy $104 to $164 billion each year.
Although prices for solar panel-generated energy are about 50 percent lower than what is obtained from central power grids, most consumers still do not consider solar power as an economically feasible option.
For many consumer[s], the decision to put solar panels on their roofs wasn’t just about saving money or saving the environment. It was an investment decision. The ability to now sell their excess energy to other customers represents the return on their investment.
This new system beats the conventional model of selling excess energy for a lower feed-in tariff (FIT) which is then sold at a higher rate from the grid.
Jemma Green elaborates:
Presently, if you’ve got surplus solar electricity you sell it back for a low feed-in tariff and buy it back (from the grid) for a high rate. Using (Power Ledger), you can sell it to your neighbor at somewhere between the two – less than the uniform tariff but more than you would get from selling it to their retailer.
A BRIGHTER FUTURE
With Australian feed-in tariff rates on the decline, initiatives like Power Ledger are disrupting the energy sector in a positive way. Just as Airbnb and Uber have up-ended the hospitality and transport markets, blockchain-based solutions have the potential to change ways people buy and sell energy to power homes.
Green summarizes this sentiment:
The benefits of distributed renewable energy will flow on to those who, at the moment, can least afford to participate; we think that’s pretty special.
As dwellings of all sizes become more environmentally efficient and microgrid systems become mainstream, the costs for producing and purchasing energy decreases on all fronts. Peer-to-peer energy sharing through blockchain technology brings about a revolution in the way we consume and share utilities. Looking beyond profit-generating models, designs like those of Power Ledger can allow consumers to gift their excess energy to anyone in. Idyllic speculation aside, we can remain confident that the blockchain retains a significant place in the global conversation surrounding new energy models for the world.