The Power of Decentralization: How Blockchain is Driving Energy Innovation

Renewable energy is produced from renewable resources, such as wind, sunlight photovoltaics (PV), biomass, biogas, hydropower, and geothermal. These resources are constantly replenished; therefore, this type of energy has many benefits, including environmental and financial ones. Companies and individuals are now aware of these benefits and ready to explore the opportunities to transition to renewables.

One of the witnesses of the importance of renewable energy is RE100, the global corporate renewable energy initiative that brings together large and ambitious businesses committed to 100% renewable electricity. The RE100 currently counts 398 members, including companies such as Airbnb, Accenture, Apple, Nike, Microsoft and many others. By stipulating this in their procurement solicitations, businesses are also encouraging the usage of renewable energy in their supply chains. In fact, Apple launched the Supplier Clean Energy Program in 2015 to help transition to clean energy in their manufacturing supply chain. So far, their program counts 213 suppliers.

Corporate players have great prospects to contribute to a substantial amount of renewable energy development. Still, at Riddle&Code we understand how important it is to make renewable energy available for both corporations and individuals and enable a smooth transition in a secure and transparent way with our blockchain technology. Therefore, in this blog, we will look into the main characteristics of renewable energy powered by blockchain and its advantages.

Decentralized energy trading

Decentralized energy trading refers to a system where electricity is generated, traded and consumed within a local community without relying on centralized energy providers. This is made possible through the use of distributed energy resources. According to Mehdinejad et al., decentralized energy resources (DERs) are gaining momentum and forming distributed power generation, which turns consumers into prosumers. Prosumers in the energy market are individuals or organizations that produce and consume energy. They can generate their energy through renewable sources and consume energy from the grid when their own production is insufficient. Prosumers can benefit from energy independence and cost savings and contribute to a more sustainable and decentralized energy system.

Renewable energy certificates tracking

Renewable Energy Certificate (REC) is a market-based instrument used to prove that the holder owns a megawatt-hour (MWh) generated from a renewable source. It can be traded on open markets, allowing companies and individuals to offset their carbon emissions by purchasing RECs.

Blockchain technology can be used to track the generation and sale of RECs, providing a secure and transparent means of verifying the authenticity of these certificates. By using blockchain, it is possible to create a decentralized and tamper-proof record of the generation and sale of renewable energy, allowing for greater transparency and trust in the renewable energy market.

In a blockchain-based REC tracking system, each time a unit of renewable energy is generated, a new REC is created and recorded on the blockchain. This REC can then be sold on the open market, and the ownership and trade history of the certificate can be tracked and verified on the blockchain. This gives buyers and sellers confidence in the authenticity of the RECs they are buying and selling and helps to promote greater transparency and trust in the renewable energy market.

For example, a smart contract could be used to automatically buy and sell renewable energy certificates or track energy generation and consumption at a local level. Smart contracts can also be used to ensure that energy systems are operated safely and securely by incorporating rules and regulations into the contract’s code. A smart contract can enforce safety regulations, such as ensuring that energy systems are operated within specified temperature ranges, or to enforce environmental regulations, such as ensuring that energy is generated from renewable sources.

Energy data management

Energy data management and blockchain combined have the potential to improve the transparency and efficiency of energy systems. In conventional energy systems, energy data is usually stored and managed in centralized databases, which can be susceptible to tampering, errors, and other issues. With blockchain, energy data can be recorded and updated in real-time on the blockchain, providing a more accurate and up-to-date picture of energy usage and production. This means that data is recorded and stored tamper-proof, providing a secure and transparent record of energy transactions and the ability to verify the accuracy of energy data.

A blockchain-based energy data management system can also enable interoperability between different energy systems, allowing for greater integration and communication between energy producers, consumers, and energy markets. For example, automating the process of tracking and verifying energy transactions can reduce the need for intermediaries and increase the speed and efficiency of energy transactions.

Carbon offset tracking

Blockchain plays a crucial role in creating and trading carbon offset tokens. When carbon offset tokens are created on a blockchain platform, each token represents a verified unit of carbon reduction or removal. The ownership and transfer of these tokens can be tracked on the blockchain ledger in real-time. This provides a degree of transparency and accountability that is impossible with traditional carbon offset markets.

The use of blockchain also enables the creation of decentralized carbon offset platforms, where tokens can be traded directly between individuals and organizations without intermediaries. This can increase the efficiency and reduce the costs of the carbon offset market, making it more accessible to a broader range of participants.

Additionally, blockchain technology’s decentralized nature can also help ensure that carbon offset projects are properly managed and that the carbon reductions they generate are genuine and verifiable. This can increase the credibility and effectiveness of carbon offset programs and support the transition to a low-carbon economy.

Utility billing

Using blockchain, utility billing processes can also be automated, secure and transparent. A blockchain-based system can maintain an immutable ledger of all transactions, enabling energy providers to accurately and efficiently track and bill their customers for the energy they consume.

Smart contracts can automate the billing process based on predefined rules. This eliminates the need for manual processes, reducing the risk of errors and saving time and resources. Another advantage is the increased security of sensitive data. The decentralized nature of blockchain technology makes it more difficult for hackers to access and manipulate data compared to a centralized database. This provides a higher level of protection for the customer’s personal and billing information.

Conclusion

The integration of blockchain and decentralized energy systems is still in the early stages, but the benefits are clear. As more organizations and communities adopt this technology, we can expect greater capability and innovation in the energy sector, leading to a more sustainable and equitable energy future for all. It is an exciting time to be part of this growing movement, and we are eager to witness how decentralized energy and blockchain technology will shape the future of energy production and distribution!