Cryptocurrency projects in the energy sector: Are they any good for the industry?
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- Sep 20, 2019 2:00 pm GMTSep 19, 2019 10:37 pm GMT
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This item is part of the Special Issue - 2019-09 - Blockchain in Utilities, click here for more
Nowadays, we are witnessing the appearance of numerous cryptocurrency projects. Blockchain’s disruptive power is threatening every industry in the world, and the energy sector is no exception to the rule, as it has already been a subject to numerous projects which want to change our energy industry and make it decentralized and improved.
The energy sector problem
The problem with the energy sector is that it is highly centralized. Mostly, the energy in the world is owned by a couple of billion-dollar companies, roughly speaking it is in the hands of the powerful few. To put it differently, many energy-related resources and their prices are often dictated by those people who get to control the market and earn money from energy consumers.
Therefore, if there is a single industry in the world that requires the blockchain technology to jump in and help, that is the energy sector. It will simply exclude the middlemen from the energy supply chain, and everybody would be able to enjoy consuming energy for a lower price.
Another problem with energy distribution is that it often emits carbon and is derived from non-renewable sources, thus contributing to global warming. With the introduction of blockchain and a cryptocurrency-driven system, this is bound to change as there are already many projects that are doing a great job at combating pollution and offering great solutions for a decentralized approach to energy.
On the other hand, we have been able to witness a lot of scam ICOs and failed projects which aimed too high yet failed to deliver any results.
Let’s take a look at a couple of energy-related projects that have been regarded as successful in the recent past.
Energy Web Foundation
Energy Web Foundation is a non-profit organization that aims to disrupt the energy sector with the power of blockchain technology. They consist of a team that has offices in Switzerland, Germany, and the US. According to them, by introducing blockchain into the energy sector, many problems would be solved, including transaction costs.
Furthermore, the foundation is bound to make transparency and data security better, and even to open the market related to the energy sector to more participants. In other words, they strive to create a more democratized and decentralized energy system that would lead to decarbonization and digitalization of the entire industry. Apart from integrating state-of-the-art technologies and developing solutions, they also co-create certifications and standards for making this type of software and system architectures. Finally, the foundation is dedicated to building a community which will focus on improving the overall state in the energy sector.
WePower is a concrete idea of how to apply blockchain in the energy sector. It is a service that will offer its clients to connect directly to producers of green energy so that they could receive green electricity using digitally-enabled PPAs. Naturally, the entire project is transparent, and the electricity would be available at competitive rates.
In other words, all users will have direct access to renewable energy. Therefore, they will have control and more freedom when it comes to choosing where their electrical power comes from. Furthermore, the blockchain-based system will allow them to account for every single electricity unit that they used. With the help of standardized contracting, users will have no trouble paying fees which are going to be much lower.
Just like WePower, SunContract is a platform for energy trading that is based on blockchain technology, and it presents an innovative business model for people who want to buy and sell electricity. The platform will use a grid that already exists, and it will further upgrade it and optimize it so as to make it more efficient and less costly. Furthermore, the platform will allow greater transparency and will use the latest features of blockchain technology and renewable energies in order to create a unique service. Just like WePower, this project is still in its early stages, but there is a detailed whitepaper of how they plan to do it.
Pylon is the first blockchain that is made so as to cater to the needs of the energy sector by providing more value for both end-users and retailers. End users will be able to save money and energy using Pylon, and retailers will be able to harness better date and offer more personalized services. Pylon provides a 100% sustainable mode, which includes data transparency and energy traceability. So far, they released a beta version of their Pylon Network Wallet and launched the MainNet Beta program. The launch of the leading network is planned for Q3 2019.
Electrify is one of the most ambitious projects, and their goal is to build a democratized access to clean energy in the region of Asia Pacific. For the first time, such retail electricity marketplace was launched back in 2017 in Singapore, which had a task to compare and source energy plans from many retailers. Furthermore, the team at Electrify also developed a P2P energy trading platform called Synergy which allows the distribution of energy resources across the energy grid in the entire city. In other words, consumers will be able to use distributed energy resources (DERs) energy by buying the power directly from them for a fair price.
To sum up, the world has been moving forward at a rapid pace, especially when it comes to making the energy sector decentralized and democratized. There are still hundreds of problems to be solved in this area, and the majority of energy-related blockchain projects are still in their infancy, with people being suspicious to them due to many ICO scams that had made similar promises. Nevertheless, companies such as Electrify Asia and others are doing a significant job that would eventually disrupt the existing energy distribution and consumption systems and pave the way for a more rational way of energy use. With so many professionals already making sure that these projects reach their ultimate goals, we will hopefully see some of them come to life.