Why hasn't a renewable energy blockchain REALLY been successful yet?
Why hasn't a renewable energy blockchain REALLY been successful yet?
Hear me out. On Reddit, the #solarpunk channel is decidedly anti-blockchain. To me, this is totally surprising and against the actual ethos of Solarpunk - to integrate technology for a bright, clean future.
Granted, blockchains don't have much reputation in alternative circles. And for a good reason. A lot is just linked to scams, get-rich-quick dudes, and speculation, apart from energy consumption arguments.
But blockchain at its core is just a distributed database. One that has no central authority, can not be tampered with, cannot be altered, nor taken down if parametrized accordingly.
This allows - as a potential - to democratize access and value creation. Renewable energy is also fundamentally decentralized. Everyone can participate!
Now, with the costs of renewable energy creation (notably solar) shrunk significantly, and the demand for energy consumption rising heavily, if we only think about the booming electric vehicles alone -
What if people could earn money by generating solar energy and selling directly to vehicles, instead of the grid? I believe this could actually boost renewable energy generation over the roof.
Generators would be rewarded with a blockchain token for the energy generated, while consumers would pay for the energy in those tokens. Therefore speculation would be curbed as the tokens are for a real thing, energy, which on top is a stable unit - kWh.
Of course there are a lot of hurdles here - mostly institutional. Usually, energy is controlled by local authorities. They don't want to allow anyone access to this market.
Then there is the distribution issue. Energy must be transported to the points of consumption, the charging stations. But due to the decentralized nature, this could actually result surprisingly cheap, as instead of transporting large distances, more charging stations in neighborhoods could reduce those distances. But still, this would require upfront charging stations and distribution investments.
I am an engineer. A dreamer. More often than not, as many many others, the realities of markets and economies clash with such ideals, thrashing generally good ideas.
But I wonder if such a scheme could made be possible. Anyone having some good suggestions? I mean mainly from the economics side. How to design the scheme, how to make it so that it is interesting to everyone? There are already several solar energy blockchains, but they kinda failed to get traction.
For the more radicals - I also dream of a money-less Solarpunk future, but to date, it seems further away than ever, looking at the right wing surge everywhere. Maybe we can build bridges at least from the technological side. Thank you if you got so far. Happy to respond to critique and questions.
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Generators would be rewarded with a blockchain token for the energy generated, while consumers would pay for the energy in those tokens.
Any electricity market should take into account that production and consumption should be balanced at all times.
If I produce today, but there's not enough consumption of electricity, should I be rewarded with a token?
If I want to consume tonight, spend the token I bought, but there's not enough production, what's the token for?
In other words: such a token assumes infinite storage of electricity, a kWh today is the same as a kWh tonight. This doesn't reflect reality.
I believe utilities have to pay for excess solar power your panels generate.
So this whole thing is kind of already done with dollars as the token.
Consumer level maybe, depends on the contract between you and your utility provider. Wholesale it's a different price every quarter hour (at least here in EU), with most power traded as future contracts (so the generating parties know in advance how much to produce).
I assumed OP was taking about the consumer level.
In either case, it seems like blockchain would be an extra layer of complication on something that already exists with no real benefit.
Yes but you are at the mercy of utility companies, who are often very restrictive. You don't get as much as you would get on the market, otherwise they wouldn't be able to resell.
What market? I don't have any way of letting my next door neighbor use the power I generate and not letting my neighbor across the street use it so there still needs to be some sort of middleman/distributor.
Without the utility how would I connect to a grid to sell to others? Who would pay for that and manage it?
I mean they can be priced differently based on time, just like real world electricity prices.
Then I buy the tokens when they're cheap, hold on to them, and spend them later when they're expensive?
This sounds like money, except harder. And every time there is a transaction, it takes place on an infrastructure that isn't free, so there is a necessary cost involved. It seems like this would make it require more effort, have more (breakable) moving parts, and be less efficient than just using money.
In any case you'll end up with a futures market for energy trading, to coordinate the balance between production and consumption.
I just highlighted the problem of 1kWh = 1 "super duper solar coin".
But yes, that market can be denominated in whatever way you want. Traditional currency is the status quo.
Blockchain currencies have been part of the status quo for almost 15 years now..
11 years ago the biggest bitcoin exchange in the world was a Magic: The Gathering web forum. This was just before said forum shut down and lost ~850,000 Bitcoins.
I mean the amount of token you get can depend on the current electricity supply.
How does the production side work? I've produced monday through saturday, and want to consume on sunday. Do I gain tokens, monday through friday, proportional to the expected production on sunday?
I honestly have no idea. I didn’t think of this. Just was replying to your original criticism with a possible fix.
You should put more thought into this, because without a proof method that relies directly on the amount of power produced then you're just hoping that people aren't minting tokens for free.
Good points. I thought to yes, reward every kwh generated. I am not sure how the not-enough-consumption is a severe issue. Is it one at all (given the amounts people would be able to generate in the first place), can it be stored, in batteries or even own vehicles...
The not-enough-production is different, every used token would be destroyed, hence there can't be more tokens than production. I think...
It's a big problem, it drives up grid frequency, then starts to destroy devices, start fires, .... In current markets, the price of electricity even goes negative at certain times (so you get paid to consume).
It can be stored only in small amounts. The total world amount of batteries can supply germany's consumption for about one day.
hence there can't be more tokens than production. I think...
For example: I produced monday through saturday and have X coins. I want to consume on sunday, but there are no producers.