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2022 Predictions: Worlds Collide – When Web3/Crypto Meets the Grid
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This item is part of the Special Issue - 2022-01 - Power Industry 2022 Trends & Predictions, click here for more
2021 was the year of COP-26, big dollars, and new faces in our industry. Large companies made increasingly ambitious climate commitments, and institutional investors that were traditionally outside the climate space allocated massive new funds, called a frenzy by some. Meanwhile, Congress passed a bi-partisan infrastructure bill to double-down on those investments.
Outside the energy space, we saw crypto assets reach new heights and go similarly “mainstream” as big institutional dollars and day trading amateurs picked over the space.
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2022 is the year when these forces come together. Web3/crypto will meet climate, and the key use case will be resiliency. Let’s briefly discuss the long term forces behind this.
Resiliency
Climate change is driving more extreme weather events, which is increasing the need for resiliency. Specifically, in 2021 the contiguous U.S. saw its second-highest number of billion-dollar weather and climate disasters on record, according to the National Oceanic and Atmospheric Administration (NOAA). Between wildfires to heat waves to extreme freezes, the resiliency of the grid was challenged like never before. Meanwhile, most federal and climate policy is driving electrification, which will only increase customer’s needs and expectations around resiliency.
Web3
As extreme weather events and electrified end-use loads drive the need for decentralized and distributed resiliency, another force is rising which is explicitly and intentionally decentralized and distributed in nature: Web3. As opposed to Web2, which created centralized data ownership and access – and the internet and social behemoths like Facebook and Google behind that ownership and access – Web3 utilizes blockchain and token-based technologies to distribute that data and ownership. Think of Web3 as the techtonic force that enables some of the “buzzier” cryptocurrencies that operate on its ideological and technological foundations. For a good primer on why Web3 is so disruptive and important, check out a thoughtful piece here
How they meet and fall in love
Initial Web3 use cases have focused thus far on the financial space and digital currencies/assets. However, 2022 will see increasing appreciation of Web3’s ability to enable distributed, coordinated control where the loss or transition of any given node typically doesn’t affect the overall system stability. Recognizing this opportunity and its applicability to the grid, entrepreneurs will begin to find ways to apply Web3 approaches to the grid and resiliency use-cases in particular.
Ultimately the extreme weather events driving this resiliency need are scary. But our industry has always risen to the challenge to provide customers with safe, reliable, and affordable service. With such a monumental challenge, we have a similarly monumental opportunity to leverage the talent and capital flooding into the Web3 and climate spaces. We will need to take some calculated risks – and leverage the full diversity of talent and mindsets – to meet the resiliency challenge for our customers and communities. But we’ve done it before and we will do it again. Bring it on 2022!
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Power Industry 2022 Trends & Predictions - January 2022
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