Blockchain is a cutting-edge technology being developed primarily in Europe and now the US. But could it, like mobile telephony which has leapfrogged traditional technology to bring widespread communications to developing countries, do likewise for energy development and delivery?
A growing number of companies believe it can, providing a viable way to fund and monetise off-grid renewable solutions in the most remote and needy parts of the world. Indeed, with some 1.2bn people lacking access, mainly in Africa and Asia, innovative approaches are needed to accelerate current electrification efforts if the sustainable development goal (SDG7) of energy for all by 2030 is to be achieved.
“We see blockchain as converting the sunlight into electricity and then into money,” says Alfred Jost, CEO and Founder of Solar Bankers.
The company, which is based in Arizona, has developed a peer-to-peer trading platform coupled to a high-performance solar PV system – claimed as 30% more efficient than standard solar modules at higher temperatures, in which the majority of people without access live, and half the price – and a solar-powered blockchain node. In addition, the company has developed an energy generating solar window and a light recycling module.
In a presentation at the first Engerati Meet on ‘Transactive Energy’, Jost said that a peer-to-peer solution is ideal for an off-grid solution as it is both easy to deploy and to use and can be delivered as part of a ‘whole package’ integrated solution.
“It is flexible and can be individualised and provides energy autonomy at the household level,” he says. “With smart contracts and cryptocurrency [SunCoin], we can tokenise commodities.”
Solar Bankers’ technology is built on the Sky Fiber blockchain technology, which Jost describes as the third generation (after bitcoin as the first and Ethereum the second). In partnership with Dubai internet company GLBrain, the goal is to create an online marketplace with an integrated payment system and social networking.
Among the current projects is a community microgrid pilot in partnership with the energy company Enerclever in Izmir, Turkey, and a 70,000 household electrification supported by the World Bank in Nigeria.
“We see the peer-to-peer market as consumer-driven as it is about the democratisation of energy and cutting out the middle man,” says Jost. "In the future, we expect to see thousands of platforms running.”
Decentralised energy markets
The involvement in blockchain projects by the World Bank and other international organisations such as the United Nations Development Programme, which has supported an initiative in Moldova, is a sign of its growing acceptance and potential for development.
Another company focussed on developing markets with a peer-to-peer blockchain platform is Netherlands-based Energy Bazaar.
“Along with blockchain we have developed a multi-layer solution including artificial intelligence and game theory as well as social dynamic modelling of the community,” says Rhythima Shinde, Co-founder of Energy Bazaar.
In another presentation at the Meet, Shinde gave as example the case of India, pointing to many inefficiencies in the system, such as operational and management problems, non-adherence to scheduling and low cost recovery, saying that blockchain should be able to overcome these by breaking down the hierarchical structure that is particularly dominant in developing countries.
“In addition to establishing decentralised markets, blockchain builds trust, it allows for distributed accounting for all the energy that is generated and used and it supports the use of smart contracts, which reduces the administrative costs,” she said.
Energy Bazaar has developed a proof of concept for energy exchange between two households, in which solar PV-battery systems store and release energy based on the demand and supply.
Shinde said that a key message from Energy Bazaar’s work is that even if the development of distributed energy resources is pushed, there still remains a need to empower consumers to their social interactions. “It is essential to incorporate their social dynamics while at the same time providing reasonable prices to both the producers and consumers in the market.”