Amongst the first of its kind in the world, Singapore recently unveiled its blockchain-powered Renewable Energy Certificate (REC) marketplace which enables buyers and sellers from all around the globe to trade renewable energy.
Despite its lack of resources such as land to produce renewable energy onshore, blockchain tech has the potential to boost renewable energy consumption in the country. Aside from providing a secure and decentralized energy transaction and supply system for private players to conduct energy trading, a free and competitive market platform presents more options for consumers which is translated into cost savings for consumers to make the switch to renewable energy.
A few other ASEAN countries are also experimenting with blockchain tech in the energy sector— one neighborhood in Bangkok, Thailand, piloted the peer-to-peer (P2P) platform which enables residents within the vicinity to buy and sell renewable energy among themselves.
In contrast to de facto monopolies for electricity production in most of the Asia region, the P2P platform now eliminates the function of the middleman, retailer in this case, and this further helps to mitigate cost for consumers. On top of that, utilizing a P2P platform in a small local community also reduces transmission losses which are incurred from long-distance energy transfers from the National Grid.
Blockchain-powered energy trading in Asia is set to match the pace adopted in North America and Europe.
Surprisingly within Asia, Governments are the ones taking the lead in blockchain integration. Reason being that the amount and the (diverse) nature of energy generation are increasing/ evolving so rapidly; more than what the physical centralized infrastructure can take on. Therefore, it makes sense for Governments to look to the private sector in this regard.
Decentralized energy trading also seeks to change consumer’s behavior thereby meeting energy conservation targets— incentivizing consumers to use electricity more efficiently by turning them into producers (known as “prosumers”).
“The system is more straightforward than it sounds. Prosumers—those who create and use electricity—are connected to consumers on a local utility grid (microgrid). Depending on a range of factors, including geography, these local grids can function independently of or in conjunction with the main power grid. The prosumers then sell excess electricity they have created to consumers.”
–TechNode, September 3, 2018
What if Blockchain is the missing link to the successful renewable energy transition?
Consider the intermittency of renewable energy which is the No. 1 problem of transitioning from fossil fuels to renewables, blockchain tech assists to match its supply and demand via an algorithm to pair producers and consumers. Consumers are also empowered in the energy trading process given the low cost of transacting (with the lack of a centralized intermediary) via the P2P platform.
Whilst it used to be that consumers were disengaged from the energy market, blockchain tech has sought to turn the tables on who gets to produce energy; thereby democratizing renewable energy consumption and may possibly be the key to kickstart a widespread deployment of renewable energy.
Thian Si Ying
Conference Producer, IBC Asia
IBC Asia is Singapore's leading event organiser. We conceive, develop and promote our own B2B industry conferences and corporate training courses, and offer tailored managed event solutions.