Are Bitcoin and Ethereum Killing Big Energy?
I’ve been saying for years that the utilities' monopoly on energy is going to come to an end. They’re slow to evolve, if not incapable of it. And they’re facing a mounting challenge from renewable energy giving corporations and consumers the ability to go off the grid.
But this most recent challenge may be the nail in the coffin for big energy companies and their monopoly on electricity generation and distribution...
Thanks to the technology behind Bitcoin and Ethereum, several groups have been able to make inroads to developing the future of energy. And, like those blockchain-supported cryptocurrencies, it’s decentralized and peer-to-peer.
“What Light from Yonder Window Breaks?”
I’ve always said that the most valuable thing about Bitcoin was the technology underlying it. No matter what kind of success or failure the coin itself saw, blockchain would play a huge role in the future.
And that’s exactly what’s happening now.
You see, just this week, a new blockchain-based token was released in the Netherlands. And, unlike Bitcoin and Ether, it’s backed by something tangible: physical energy production.
The token is called Jouliette. It’s a play on the Joule, a unit for measuring energy. And it’s going to make it possible for individuals and communities to manage and share locally produced renewable energy.
Say you’ve got solar panels on your roof. It’s a sunny day, and they’re cranking out the energy. But you’re not home to use it. You’ve gone out of town to visit family. Until now, you’ve had to sell that extra energy to the utility company for a credit on your future bill. The company then uses it to supply customers who aren’t producing their own electricity.
But with the Jouliette, you can sell that extra power to your neighbor who just cranked up his AC unit to combat the hot sun. There’s no need for a bank to intervene. There’s no restriction. And there’s none of the current barriers. He needs it, you’ve got it. So, you offer to sell it, and he pays you instantly through a peer-to-peer transaction.
You can even see in real time where the energy is going and how much is being used.
Soon, the creators hope to add even more versatility to what you can do with the Jouliette. They’re talking about using it to trade goods at a community café, facilitate a local-time banking system, and integrate other intra-community services like a car-sharing program.
More Than Delicious Chocolate
The Netherlands isn’t the only country experimenting with blockchain technology to create a peer-to-peer energy exchange. PROSUME Energy Foundation, a Switzerland-based company, is negotiating projects in Germany, France, Italy, Sweden, Belgium, and Luxembourg. And it’s doing it with energy companies that don’t want to get cut out of the loop.
The PROSUME system connects independent power producers, consumers, innovative utility companies, and energy communities in a locally shared market. Each peer in this market is free to interact in a multi-tenant ecosystem.
What that means, in the words of PROSUME co-founder Alfredo Giardina, is that this shared market will “give everyone the possibility to exchange energy in a more transparent, traceable, accessible, flexible, resilient and sustainable way.”
The goals of the system are spelled out in the “three D’s” of PROSUME:
- Decentralization — Take a look at your utility bill. The most expensive part of it is distribution services and taxes. The cost of the actual energy is miniscule in comparison. PROSUME wants to cut out those costs and create a decentralized energy community where “prosumers” are the main players — not giant utility companies.
- Digitization — Balancing energy peaks is a tough task. PROSUME hopes to use its system to better understand them, optimize the use of resources, and promote development of more sustainable energy policies.
- Decarbonization — It’s expensive to start a new fossil or nuclear company these days. Due to the high investment costs, it takes several years just to cover the initial investment needed to get it off the ground. Also, in those scenarios, many of the sources aren’t local, so there’s a higher cost associated with accessing the energy produced. PROSUME hopes to help small energy companies find alternatives by exploiting local sources and giving priority to sustainable and renewable ones.
But the PROSUME system won’t just be centered on renewable energy like the Jouliette system. You’ll be able to buy and sell fossil fuel-generated energy as well. The main goal is to improve efficiency while reducing time and costs at the same time. The result should be a cheaper electric bill. And a side effect may be the downfall of massive electric utilities.
Get in on the Action
We’ll have to wait on the benefits of the Jouliette system — it’s just being tested in a sample community in the Netherlands right now. And there aren’t any pilot programs for the PROSUME system here in the U.S. or Canada yet. But there is a way to get involved... and maybe a way to make a little profit at the same time.
PROSUME is conducting a token distribution event, also known as an initial coin offering (ICO). The foundation will be offering an upgradable token called PEF on the Ethereum platform. PROSUME will be using the proceeds from the ICO to fund operations and further develop the PROSUME platform.
The tokens will allow holders to participate in a platform where users can exchange electricity assets delivered by various sources and providers. And the foundation is offering a gift to early adopters in the form of a pre-ICO.
You’ll be able to exchange Bitcoin, Ethereum, or Litecoin for PEF at a reduced exchange rate. That reduction could lead to a bonus of up to 47% once the ICO hits the mainstream.
The pre-ICO started yesterday, but it lasts for 11 more days, so there’s still a chance to get involved if you’re interested.
To investing with integrity,
Energy and Capital
Follow me on Twitter @AllBeingsEqual
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