19 Jan Will Blockchain Reinvent Energy Use? Yes, if it’s up to Sharge
The kids at Sharge made quite the splash yesterday when Forbes added them to their prestigious Top 30 Under 30 list of promising entrepreneurs.
In addition to offering a hearty congratulations to those brilliant young upstarts, we thought it an opportune moment to help the energy manager community understand how blockchain has the potential to transform our entire industry.
This is a theme we’ll cover in our upcoming webinar, so make sure to reserve your spot here if you want to take an even deeper dive!
2017 Energy Trends: What is blockchain?
Don’t worry if this is the first time you’ve heard about blockchain. It’s a highly technical concept that is taking the world of financial technology (FinTech) by storm, especially when it comes to a virtual currency called Bitcoin, a potentially more familiar term.
Nothing the average energy manager should expect to encounter in their daily work, right?
Blockchain is a technology that allows anyone to create a registry or “ledger” divided among thousands of computers around the world. A record is simply a file. All the files on those thousands of computers are identical. If someone tries to alter a record, the change becomes public knowledge. Alterations are also time-based, synchronised automatically and cannot be deleted or undone. This concept of an immutable historic ledger makes it impossible to transact in secret and is key to understanding why the blockchain concept is so revolutionary.
A second essential takeaway is that blockchain networks are distributed, with each node (computer) having multiple connection to other equal nodes. This makes the network very resilient to failures and attacks. Even if one node disappears from the network, the information it contains does not.
So what does all of this have to do with energy? While blockchain is disrupting finance first as expected, it has non-financial uses as well. For instance, it is possible to create a blockchain-based platform to share energy and create a non-monetary value exchange system. In fact, this is exactly what Sharge is trying to do – so let’s take a closer look at their example.
What is Sharge?
Sharge created a portable device that allows people to share the energy they generate and store. Brilliant, right? Imagine that your electric car runs out of battery and you’re miles away from the nearest charging station. But if you have a sharger nearby, you’re saved! Someone with the device and the energy you need will come to your rescue.
So what’s the catch? Are users expected to simply give away their energy for free?
There a few models to solve the problem of remunerating users for the energy they generate and share. One is based on “rewards” for homes or businesses that have installed renewable generators to produce excess energy and pump it back to the grid. Another option is to sell that energy directly (peer-to-peer) and let market forces prevail: whoever wants it will probably pay for it.
However, selling energy without registering as a trading company is illegal in some countries (in Spain, for instance). Enter blockchain: the ultimate workaround. Thanks to its distributed ledger technology, Sharge created their own cryptocurrency called “sharges” so that people who share energy can get compensated.
Will Blockchain Reinvent Energy Management?
The Forbes nod is a pretty good indication that blockchain is on the verge of majorly disrupting the energy efficiency sector. As we explained in our post on 2017 energy efficiency trends, its development and implementation is closely tied to the rise of microgrids.
With the advent of blockchain-based technologies like Sharge, a multinational automobile manufacturer, for example, could create its own microgrid to generate and exchange energy within its own industrial ecosystem of factories and nearby buildings. With blockchain, it could secure the exchange of energy and monetary exchange behind without incurring legal problems or extra costs from a host of brokers and middlemen. Smart city councils could also create their own blockchain networks to share local energy resources more easily and openly.
Will blockchain remain a must-follow trend in the coming months and years? What implications will it have for energy managers? Join us on January 26th at 3pm CET for an in-depth conversation about 2017 energy trends led by our Research & Development Director Miguel Cruz.