Quantcast
Environmental News for a Healthier Planet and Life

Help Support EcoWatch

How Blockchain Can Democratize Green Power

Renewable Energy
How Blockchain Can Democratize Green Power
Shutterstock

By Srinivasan Keshav

Imagine buying a solar panel from a hardware store, mounting it on your roof, then selling the green electricity you produce at a price you set.

Is this even possible? Some companies certainly think so. These startups are harnessing the power of blockchains to democratize green power.


Before you can understand how blockchains are part of the solution, you first need to know a few things about the green electricity market.

Today, independent auditors assess renewable energy producers and certify their electricity as "green." These producers can then sell Renewable Energy Certificates (RECs) to consumers who want to buy green energy.

This is how corporations such as Apple and Google can say they are 100 percent green. They aren't generating their own green electricity, but rather purchasing certificates from green-energy producers.

Of course, the actual energy they use is not always green. As long as every unit of energy they consume matches up with a purchased REC, green energy is displacing carbon-intense energy. A market for RECs creates a strong signal for investment in green electricity generation.

Some companies do power some or all of their operations using Power Purchase Agreements (PPAs). This commits them to purchasing a certain amount of energy at a certain price from renewable-energy producers over time-scales of about 20 years or so. PPAs reduce risk for generators by guaranteeing return on investment, thus creating a strong motivation for long-term investment in green generation.

Both of these approaches, however, discriminate against small generators of green electricity.

It's Not Easy Generating Green

The certification process for RECs is cumbersome and expensive, with physical audits, so it doesn't make sense for mom-and-pop green generators. Similarly, PPAs can only be negotiated by large green generators.

For these two reasons, small-scale green generators must make do with whatever price their local utility pays them. This price can be volatile due to meddling by legislators as well as by the utilities themselves. Thus, small generators are exposed to higher levels of risk than bigger players.

What if we could reduce the cost of certification, eliminate onerous auditing and avoid non-market price controls, so that even a small-scale green generator could de-risk investments?

This is what companies such as PowerLedger in Australia and LO3 Energy in Brooklyn provide. They use blockchains to store generation certificates that are created by tamper-proof meters attached to solar panels.

These blockchains also store transaction records when the certificates are traded, so that the same unit of generation cannot be resold. By eliminating auditors, transaction costs and price regulation, this solution makes renewable-energy investment attractive even for small players.

A Scaling Problem

Unfortunately, this approach has a scaling problem.

Today's blockchains cannot support the addition of more than a few hundred certificates or trades (we'll call them both "transactions") per second. This is because blockchain servers need to agree on the contents of each block, despite server and communication failure and the presence of malicious servers. This is the well-known and difficult "consensus problem." Because of this problem, the scale needed to support hundreds of millions of solar panels is beyond the reach of current blockchain technology.

For instance, BitCoin, the best-known blockchain, supports only about 10 transactions per second and HyperLedger, IBM's competing solution, under 1,000 transactions per second. A democratic REC system would generate transactions at a rate hundreds of times faster.

Blockchains can store generation certificates linked to green energy, but are currently unable to handle the volume that would be produced by a large-scale deployment of solar panels.Shutterstock

My colleagues at the University of Waterloo have recently devised a new solution to the consensus problem called Canopus.

Canopus takes a server's location on the internet cloud into account, minimizing communication between geographically-distant servers. By keeping most communications local and fast, blockchain servers can process far more transaction records each second than a traditional consensus protocol that doesn't take location into account. This improvement in scaling allows even mom-and-pop green generators to obtain certificates and participate in energy transactions.

One Million Transactions Per Second

We are currently building a prototype blockchain using Canopus that we hope will handle more than one million transactions per second. In our solution, smart meters attached to solar panels send RECs to brokers. Consumers can purchase these RECs using their own brokers.

If successful, our work will encourage homeowners and small businesses to invest in renewable energy technologies to become green generators. It would also encourage Ontario's electricity consumers to become 100 percent green, just like Apple and Google.

Indeed, since blockchain knows no boundaries, our system could allow green generators in sun-drenched developing countries to recoup their investment in green generation by selling RECs to consumers around the world. Of course, this requires placing blockchain servers in every region of the world, but this is easily done using existing datacenter infrastructure.

This would reduce the global carbon footprint, and would be more efficient—thus less costly—than deploying solar panels in sun-poor northern countries.

Blockchains Are for EVs Too

The development of a scalable, tamperproof and globally accessible energy blockchain would enable other energy transactions.

Emissions-free electric vehicles (EVs) allow consumers to use electricity instead of gasoline to meet their transportation needs. While consumers get incentives to purchase EVs, they receive none to operate them.

Shutterstock

Blockchain makes it possible to reward EV owners for operating their EVs, or providing ancillary services to utilities, making the vehicles more affordable. EV owners could be further rewarded if they charged their cars with green electricity.

Close to Reality?

Although the technology for building scalable blockchains will soon exist, one problem is that some jurisdictions, including Ontario, give local distribution companies tight control on integrating green generation to ensure grid stability.

While this is certainly necessary, there is no intrinsic need for green generators to be tied into a provincially mandated pricing plan such as the microFIT scheme. The province should allow generators to sell their electricity to the highest bidder, just like any other producer.

We also need to build, deploy and critically evaluate small-scale prototypes of blockchain-based transactive-energy systems so that we can learn by doing.

As solar and wind costs continue to drop and energy storage technologies reach maturity, it is becoming possible to turn away from carbon-intense electricity generation and gasoline vehicles.

Democratizing the deployment of these technologies using scalable energy blockchains will, we hope, accelerate this important societal transformation.

Reposted with permission from our media associate The Conversation.

This fall brings three new environmental movies. David Attenborough: A Life On Our Planet | Official Trailer

This week marks the official start of fall, but longer nights and colder days can make it harder to spend time outdoors. Luckily, there are several inspiring environmental films that can be streamed at home.

Read More Show Less

EcoWatch Daily Newsletter

Amazon Employees for Climate Justice walk out and rally at the company's headquarters to demand that leaders take action on climate change in Seattle, Washington on Sept. 20, 2019. JASON REDMOND / AFP via Getty Images

The world's largest online retailer is making it slightly easier for customer to make eco-conscious choices.

Read More Show Less

Trending

Moms Clean Air Force members attend a press conference hosted by Senator Tom Udall (D-N.M.) and Senator Richard Blumenthal (D-Conn.) announcing legislation to ban chlorpyrifos on July 25, 2017. Moms Clean Air Force

The Trump administration's Environmental Protection Agency (EPA) released a risk assessment for toxic pesticide chlorpyrifos Tuesday that downplayed its effects on children's brains and may be the first indication of how the administration's "secret science" policy could impact public health.

Read More Show Less
Evacuees wait to board a bus as they are evacuated by local and state government officials before the arrival of Hurricane Laura on August 26, 2020 in Lake Charles, Louisiana. Joe Raedle / Getty Images

By Maria Trimarchi and Sarah Gleim

If all the glaciers and ice caps on the planet melted, global sea level would rise by about 230 feet. That amount of water would flood nearly every coastal city around the world [source: U.S. Geological Survey]. Rising temperatures, melting arctic ice, drought, desertification and other catastrophic effects of climate change are not examples of future troubles — they are reality today. Climate change isn't just about the environment; its effects touch every part of our lives, from the stability of our governments and economies to our health and where we live.

Read More Show Less
In 'My Octopus Teacher,' Craig Foster becomes fascinated with an octopus and visits her for hundreds of days in a row. Netflix

In his latest documentary, My Octopus Teacher, free diver and filmmaker Craig Foster tells a unique story about his friendship and bond with an octopus in a kelp forest in Cape Town, South Africa. It's been labeled "the love story that we need right now" by The Cut.

Read More Show Less

Support Ecowatch