By Alex Kimani
Despite its enormous potential to transform the global energy sector, blockchain technology has largely remained confined to the financial sector, with the energy industry consistently catalyzed by innovations in sub-sectors such as rooftop solar, offshore wind, smart metering, battery storage, and electric vehicles.
But this is now beginning to change thanks to the Enterprise Ethereum blockchain emerging as the newest technology to spur growth in the energy sector across a raft of verticals from peer-to-peer (P2P) energy trading and smart contracts to green energy provenance and systems interoperability.
Indeed, a recent Global Blockchain in Energy Market research document says blockchain technology in the energy industry is about to record explosive growth over the next five years, with blockchain energy startups such as Power Ledger, WePower, UAB, and LO3 Energy set to open up new possibilities for the energy industry, ranging from cost-savings for the consumer by eliminating third parties in energy deals and faster transaction settlements, all the way to the emergence of a new market for peer-to-peer and excess renewable energy trading.
Here are 5 energy startups that are using blockchain technology in innovative ways to disrupt the energy sector.
#1. Power Ledger: Peer-to-Peer (P2P) Energy Trading
Peer-to-Peer (P2P) energy trading is a pretty novel paradigm of power system operation whereby people generate their own energy from renewable sources in factories, dwellings, and offices and factories and share it with each other locally.
Peer-to-peer energy trading has been around for quite some time now. However, traditional P2P has a major drawback: It requires a central entity, usually a utility company, to facilitate energy transfer from prosumers to buyers.
Thankfully, blockchain technology is radically changing the P2P energy trading model by cutting out the middleman and allowing prosumers to trade directly with each other. This new model is particularly attractive to people who generate their own renewable power.
Australian Power Ledger is championing the new, middleman-less P2P energy trading model by organizing local communities into the so-called “microgrids”–essentially local power grids almost fully autonomous and independent of the national electricity grid.
Another company doing this is Grid+, a US startup that has developed an Ethereum-powered blockchain platform that allows consumers to cut out the energy retailer and buy energy directly from producers.
#2. WePower: Selling Renewable Energy to Corporates
Whereas many energy and tech companies have been generating their own renewable energy, the majority typically buy their renewable energy from a renewable producer through a formal Power Purchase Agreement (PPA).
PPAs usually involve a set amount of electricity for a fixed period, frequently several years. However, as is the case with many current power purchase arrangements, PPAs have shortcomings: What happens when the company moves mid-contract? This points to a glaring lack of flexibility by PPAs.
WePower is an Australian-based blockchain startup backed by Japan’s Marubeni that connects energy buyers (end users and investors) directly with the green energy producers and creates an opportunity to purchase energy upfront at below-market rates.
WePower has developed Ethereum Smart Energy contract tokens that it sells to consumers in a typical e-commerce experience. The company’s tokens are used to standardize, simplify, and fractionalize renewable energy such that corporates can not only buy exactly what they need but can also resell their excess capacity.
#3. Acciona: Green Hydrogen Tracking
After decades of stagnation and multiple false dawns, the hydrogen economy now appears primed for a major takeoff. A growing number of countries and industries are proactively investing in hydrogen technologies, with hydrogen being touted as the ‘fuel of the future.’ Meanwhile, industry experts are predicting that hydrogen could become a globally-traded energy source, just like oil and gas, while the Bank of America says the industry is at a tipping point and set to explode into a $11 trillion marketplace.
At the center of this all is green hydrogen, or hydrogen generated from 100% zero-carbon sources due to its superior green credentials.
The world’s green hydrogen leaders have joined hands with an ambitious goal to drive a 50-fold scale-up in green hydrogen production over the next six years.
The Green Hydrogen Catapult Initiative aims to drive a 50-fold increase in green hydrogen to 25GW by 2026, a scale that could significantly drive down hydrogen costs to below $2/kg, thus making the fuel source competitive with fossil fuels in power generation.
But how can end-users be sure that the hydrogen they are buying is strictly the green type and not, say, gray hydrogen made from cracking natural gas?
Luckily, Spanish multinational Acciona has developed the first platform to guarantee the renewable origin of green hydrogen.
GreenH2chain is a blockchain platform that will enable customers from anywhere in the world to verify and visualize the entire green hydrogen value chain in real time.
The blockchain platform will allow renewable hydrogen consumers to monitor the entire decarbonization process of their own energy supply and also verify the transportation and delivery process.
Similarly, Norway’s Hydro, in conjunction with DNV, has developed a blockchain-based platform for the provenance of metal products along its supply chain. Dubbed Tag. Trace. Trust., the platform allows anyone to instantly check the validity, data, and authenticity of the product’s environmental profile.
#4. Everledger: Blockchain Battery Recycling App
Last year, the Global Battery Alliance (GBA) launched ‘Battery Passport’, a global ‘quality seal’ and verification tool on a digital platform that will be used to share value chain data of EV batteries. Battery Passport–outlining 10 guiding principles and co-signed by 42 global organizations–intends to become the first step in a responsible and sustainable battery value chain. The principles are based on existing standards such as OECD’s Due Diligence Guidance as well as economically viable considerations for a low carbon economy.
And now another startup has taken that idea a step further by launching a blockchain service that will encourage the recycling of lithium-ion batteries.
Blockchain startup Everledger has received a $357,000 award from the U.S. Department of Energy (DoE) after developing an app that rewards consumers for recycling portable batteries found in phones, laptops, and other devices. Everledger is part of the Team Portables consortium, with other members being HP, Call2recycle, and mobile phone company Fairphone.
The DoE has been supporting solutions that contribute to the capture of up to 90% of lithium-based batteries in the U.S. for recycling or re-introduction of materials into the supply chain and has earmarked a total of $5.5 million to award winners across phased competitions.
Battery recycling has lately been attracting plenty of investor interest, with a recent IHS Markit Report noting that a large number of EV batteries are approaching their end-of-life stage, thus presenting a huge opportunity for recycling. IHS has projected that over 500,000 tons (57 GWh) of batteries reached their end-of-life point in 2020 with 1.2 million tons (121 GWh) and 3.5 million tons (350 GWh) expected to do so in 2025 and 2030, respectively, thus creating a sizeable repository of recyclable material.
#5. Greeneum: Selling Crypto Carbon Credits
A month ago, China surprised the world after launching the world’s largest carbon market in an attempt to rein in on the nation’s runaway carbon emissions. China’s emissions trading system will cover its extensive power industry, including ~2,000 power generation facilities which represent about 30% of the nation’s total emissions. However, over time, the platform will expand to encompass heavy industries like oil, gas, steel, aluminum, cement, and chemicals.
Despite their good intentions, carbon offsets have lately come under criticism, with scientists, activists, and concerned citizens questioning whether many companies are using carbon offsets as a free pass for inaction. The types of carbon offset projects that are implemented are diverse, ranging from forestry sequestration projects to energy efficiency and renewable energy projects. The world needs to lower annual emissions by 29-32 gigatonnes of equivalent carbon dioxide (CO2e) by 2030 to have a fighting chance to stay below 1.5°C. That’s ~5x the current commitments by companies, organizations, and governments. We need to lower our GHG emissions by 45% over the next decade if we are to avert catastrophic planetary changes.
Luckily, Greeneum is a blockchain startup offering a different favor of carbon offsets.
The Israeli startup is incentivizing customers to save energy and adopt eco-friendly lifestyles by awarding Green Certificates and Carbon Credits in the form of cryptocurrency for every watt-hour of renewable energy generated.
The Greeneum Network is devoted to accelerating the worldwide transition to clean energy and sustainable technologies using Blockchain and customized machine learning. Greeneum’s digital assets are connected to profitable green energy projects with unique, groundbreaking technology that certifies green energy and optimizes power yield.