There are any number of reasons to reduce energy waste. From lowering power bills to preventing an environmental catastrophe, switching to more efficient, renewable energy makes sense.
Crypto mining has copped its fair share of criticism for consuming huge amounts of electricity, and with good reason. But while crypto remains controversial, the blockchain technology behind it could reduce energy waste on a much larger scale.
As it stands, a huge percentage of the energy we produce goes to waste. According to a 2017 analysis published by Lawrence Livermore National Library, more than two-thirds of the energy produced in the U.S. ends up as “rejected energy.” In essence, that means it gets cast off as heat.
Your car is a prime example of this. As the engine burns fuel, it produces energy. Some of this energy propels the car and powers other accessories like the radio or the A/C. However, a large percentage of that energy escapes as heat waste through the engine or the exhaust pipe.
A traditional power grid faces similar problems. Including production, transport, and distribution, there are several points at which energy escapes. The farther the electricity has to travel from its source, the greater the loss of energy.
So, how can blockchain help reduce energy waste in power grids?
Blockchain to the rescue
One of the greatest challenges of distributing energy is making sure it gets to the right place at the right time. To do this, energy companies measure and analyze user data.
Businesses like LO3 Energy are using blockchain to make that data transfer more efficient and secure. According to LO3 Marketing Manager Melanie Adamson, their Exergy blockchain aims to improve energy efficiency on a large scale.
“The Exergy network is a global network that permissions, standardizes, and monetizes the energy data so others can use the information to efficiently manage grid operations or innovate a plethora of opportunities with the use of that information,” Adamson told Coined Times.
“The whole reason we have developed Exergy is to help move the planet toward an emissions-free future by improving grid efficiency and rewarding consumer choice,” she added.
The company aims to do this “by connecting together the data from all the new technologies – renewable energy generation, electric vehicles, and smart devices,” among others.
Through the use of standardized data formats and protocols, the Exergy blockchain can securely log, store, and manage energy data produced by all the different devices at the grid edge.
The Exergy network uses smart meters, which collect users’ household energy data. These smart meters then communicate with the network so that households can receive just the right amount of energy to meet their needs.
Under this system, consumers have complete ownership of their energy data. They can then sell that data to energy providers in exchange for reduced bills or greater energy choices.
“It is up to third parties … to provide incentives to consumers for their energy choices,” Adamson said. “In some cases, this may result in reduced bills. In other cases, it may result in allowing preferred choices, such as buying local green energy from neighbors.”
Using “microgrids” to reduce energy waste
LO3 Energy’s best-known project to date is the Brooklyn Microgrid, which it developed in cooperation with Siemens. True to its name, the project has turned a block in the New York neighborhood of Brooklyn into a self-sustaining energy grid. Using blockchain, the virtual microgrid allows neighbors to sell excess solar energy, which consumers can then purchase. Currently, New York regulations don’t allow users to trade energy directly, although LO3 is working to change that.
Because it exists within one city block, the Brooklyn Microgrid is extremely efficient. However, microgrids could function on a much larger scale than that.
“Concentrated microgrids create the best grid efficiencies because moving electricity around is a loss-creating process,” Adamson said.
But a microgrid does not necessarily need to be based on location. Virtual microgrids can connect participants in any location into a transactive marketplace to trade energy.
Blockchain enables microgrids to function across large distances by tracing all energy to its source. In theory, a green energy producer could deliver power to a consumer 500 km away. Thanks to blockchain, both parties would know where that energy began and where it ended up.
LO3 Energy is developing a crypto token called Exergy (XRG) to work in conjunction with the Exergy network.
A global energy revolution
While LO3 Energy has gained attention in the U.S., several other companies around the world are also using blockchain to reduce energy waste. Down south in Australia, Power Ledger has carried out several smart grid pilot projects and is also releasing its own crypto token. Slovenian firm Robotina is targeting the European market with a blockchain network that claims to lower bills and reduce energy waste.
No matter which of these companies breaks into the mainstream first, it’s clear than blockchain will play an important role in the way all of us use energy in the future.