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Blockchain In Green Energy Is Outside of Business Interests

Daniil Danchenko, Catherine Lange

All over the world people started to pay attention to the ecology. Global warming, melting ice hats in the Arctic, problematic ecological situation and all the other “funny” things are getting more and more dire. One of the reasons is our growing dependence on electricity as an essential component of our modern society where we often need even to charge up the shoes, cellphone and all the various wearable bells and whistles that became affordable even to the kids working at summer.

This only amplifies the problem because  traditional power plants are generally “dirty,” they lave whole lot of toxic waste after themselves, poison the earth and water and are typically to bring the entire load of problems with them. That's the reason why renewables always seemed like a lovely idea. However, as usual, people became being serious about it only when mother nature decided to give humanity a hefty whack. Only after storms started to pound USA season after season, water levels began to rise and swallow islands with villages upon them, and seasonal forest fires became a regular thing due to the constant heatwaves people came to the conclusion that they need to do something about it. This was the rise of the new aspect of the industry, energy of the new type.  

However, it’s a starter of a new whole section of problems. Sure thing that outside of the city limits it was entirely possible and could’ve been achieved without any significant complications, but in the city all this energy topic has much-much more questions than answers in the foreseeable future. The main reason is relatively simple; due to the very nature of renewables (simply put - wind is not blowing all the time and sun is not always shining), the energy that they give out is intermittent, while traditional, polluting power plants can work nonstop, as long as they have fuel.

So, it’s relatively obvious that renewables alone are not able to fix everything. Does it mean they do not worth it, and we need to get rid of the ridiculous idea to make renewables mainstream? Not so fast. We have blockchain now.

There is a considerable amount of reasons why blockchain is a long-sought solution for the whole set of issues. At the moment, market pretty much surges with the relatively cheap, ready available solutions for the enthusiasts that are just a couple of mouse clicks away from anyone interested. It results in appearing a new class of the energy consumers, so-called prosumers (from professionals and consumers) or people that not only consume energy but also produce it and can be independent of the general grid. However, until now what went around didn't come around - at best prosumers couldn’t expect anything more than a governmentally issued discount. However, with the power of the blockchain they are facing a brave new world of opportunities, which were technically unavailable before that moment.

But that's not all - old way of working is far too expensive due to much energy loss as the power is basically flying into the “great void” when using the old mould. With blockchain this problem is solved thanks to the system allowing to reroute power into the problematic spots, dramatically reducing related indirect losses.

Also, this does not mean that the bigwigs of the energy business are not interested in the blockchain. Quite the contrary! A lot of them don’t mind to break the existing status quo on the market, related with the lack of interaction between retail and wholesale sectors of the energy industry. On the one hand - it’s beneficial for the “small guy” since fuel surges, market crashes and all the other things don’t bother them. But on the other had prosumers do not have any real way to get on the grid and use their resources for the actual practical implementation.

Plus, “old world” networks are not going to be cut anyway - they are not scaled well but still remain unsafe- especially when we are talking about emergencies and natural disasters.

The blockchain is a practical solution to all those problems. But we are living in a world that is far from being perfect, and it’s not that ideal - otherwise energy industry would’ve been implementing smart meters into every household right now. One of the first blockchain implementations in the renewable energy was back in Brooklyn, where company LO3 had created a microgrid in the city. So there is a truckload of issues that they are facing even now, in this seemingly simple and elegant solution to the upcoming energy crisis. Three main predicaments can be clearly seen: lack of well defined legal framework, lack of the necessary conditions to actually sell energy and usage of highly popular Etherum blockchain for the smart contracts. Well, it is fairly busy and periodic price hikes for the “GAS” simply kills economic viability of such model.

And business is never about altruism and burning desire is almost never the main driver behind it. When it comes to business every man wants to see the magic word, PROFIT. Low profitability or its absence are obvious in the renewable industry, at least for now. Without governmental support, green tariffs, tax cuts and all the various benefits that make green energy look interesting to users it’s not really viable at the moment.  And even with all the help -according to the words of the director of the Italian solar power plant, Leoni FRANKO  that level of support isn’t enough.

“Since 2005 till 2012 our central government was issuing subsidized grants for creations of solar power plants and then was paying for the generation of energy. Later on, we also started to sell the energy to the local government,” - said Mr. FRANKO.

However, he also added that it is not enough - despite o the fact that government is going to continue paying them for the many years to come, they are looking for the alternative source of income, due to the fact that their profits leave a lot to be desired, and they are looking for a more profitable way to use their energy, like mining crypto.

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