A New Market for Energy: Exciting Possibilities Offered by Distributed Ledger Technology
Today’s innovators in many industries are exploring the possibilities offered by distributed ledger systems to create new, egalitarian markets for all manner of commodities. From its origins in the financial sector, distributed ledger technology is expanding to include a multitude of exciting possibilities. One of the most promising development enabled by this technology is the potential emergence of new international energy markets.
As our environment continues to change as a result of human activity, there is an imperative to incentivize participation in efforts that reduce consumer’s carbon emissions. This crossroads of technology and need provides an incredible opportunity to create a new energy market that rewards those who opt in to technologies that mitigate their impact on the environment. Let’s take a deeper look into the possibilities created by distributed ledger systems in the energy sector.
What is Distributed Ledger Technology?
If you follow the news, you’re probably familiar with Bitcoin, the cryptocurrency that has been making headlines recently with its volatile fluctuations in value. While the future of cryptocurrencies like Bitcoin remains a matter of debate, the technology that supports it offers many innovative, alternative uses.
This technology, Blockchain, has been called “a new type of internet” – a distributed database (or ledger) that is hosted across millions of computers simultaneously. Blockchain Revolution authors Don and Alex Tapscott describe it as “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” Because information held on blockchain is not stored in any single location, it is always publicly accessible and easy to verify, yet also theoretically immune to corruption from any single entity.
As this technology emerges from financial market applications, it offers possibilities beyond recording financial transactions as public record. Innovators are now focusing on the development of distributed ledger applications in fields as diverse as healthcare, distribution and logistics, and alternative energy.
Creating a New Energy Market
The initial approach to creating new energy markets through distributed ledger technology has largely focused on alternative energy sources such as solar panels or wind turbines and the microgrids that they power. Microgrids, small networks of electricity producers and users that are able to function whether connected to existing energy infrastructure or separate from it, have provided an important testing ground for the sharing or trading of commodified energy. Reuters recently reported that “As the market liberalizes and renewable energy grows, blockchain offers a way to better handle the increasingly complex and decentralized transactions between users, large- and small-scale producers, retailers and even traders and utilities.”
In addition to their growing applications when connected to microgrids or energy generators, distributed ledgers offer untapped possibilities in the tracking and trading of carbon offsets – “tokens” earned by consumers who offset their energy usage through the use of various technologies. These may include solar arrays, wind turbines, or smaller devices such as Technology Elevated’s range of products designed to lower fuel consumption while reducing harmful emissions. Technology Elevated is pioneering the development of a new energy market platform by integrating emissions-reducing products and strategies with distributed ledger technology.