In today’s tech world, it could be said that very few buzzwords make a greater impression than the term, ‘blockchain’. Touted as the next big technological advance and even predicted (by some) to potentially have as much (if not greater) impact than the birth of the internet itself, blockchain technology is poised to revolutionize virtually everything, from banking to healthcare, telecommunications to agriculture and so on.
In the context of the energy sector where utilities are already heavily ladened with the challenge of adapting on so many fronts to systematic changes being driven by disruptive innovations in renewable energy; even a mere glimpse of the practical implication of adopting blockchain technology in the industry sends imaginations running wild.
For Africa’s power market which is largely at a tipping point, experts hint that the continent is advantageously positioned for the kind of disruption that blockchain could bring to the industry. According to Victor Alagbe, “Africa has fewer legacy systems than other regions; hence, innovative and disruptive technologies have clean slates from which to start without much antagonism from the established order”. Victor is the VP operations and blockchain strategist at OneWatt solar.
Essentially, Africa’s developing economies could potentially bypass decades or centuries worth of development by leveraging on blockchain technology to leapfrog the continent’s power market and address the prevailing issue of widespread energy poverty across the continent.
The Groundwork: Understanding Blockchain Technology
In laying the groundwork for our understanding of blockchain technology, it is fundamentally crucial to clarify that while blockchain and bitcoin are often mentioned in the same breath, blockchain technology is much more than just a platform of cryptocurrencies.
By design, blockchain leverages on the combined use of strong cryptography, a peer-to-peer network and a protocol, to host a distributed ledger that keeps an unalterable record of all transactions that ever occurred in the blockchain ecosystem/network. It does this by maintaining a decentralized network of computers working independently and in sync to store and verify records in such a way that once the record of a new transaction has been written and verified by all the computers in the network, it is secured from being manipulated by anyone in the network.
Having the core principle of decentralization, transparency and anonymity, blockchain provides a means of recording, verifying and transferring assets (directly) without the need for an intermediary such as a bank or otherwise.
As a tool, blockchain transcends financial transactions and its extension to the energy industry is driving startups, major corporations and governments to rethink the basic infrastructure of how energy is secured, distributed and accounted for.
Africa’s Blockchain Energy Solutions
Leveraging on blockchain technology, Nigerian clean energy firm, OneWattSolar is already rewriting the rules of the continent’s renewable energy market. Essentially, the Lagos based startup has devised a way for thousands of Africans to conveniently buy solar energy (using blockchain tokens) without having to pay for a solar energy system itself. Through its token sales, OneWattSolar finances the installation and maintenance of the residential solar energy unit.
Furthermore, in ensuring that customers only pay for the energy they use, OneWattSolar’s PV systems are equipped with internet-enabled routers that collect real-time data on energy usage which is billed monthly on the basis of a pay-as-you-go financing model.
Also pioneering the adoption of blockchain technology in Africa’s energy sector, South African based firm, SoundExchange developed a blockchain powered platform that allows users to lease out their solar panels. The platform ensures that assets are recorded on a blockchain and that payments are made using cryptocurrencies.
Riding on the waves of decentralized energy sources such as solar and wind power, ‘blockchained’ energy solutions are poised to shape a new wave of innovations that could upset the traditional economics of Africa’s power market as we know it.
Africa is largely an emerging market where most states are yet to have a fully established energy infrastructure. This presents an opportunity for the continent’s developing nations to leapfrog their economies by factoring in a more sophisticated approach in forging a sustainable and efficient energy structure.
Blockchain and decentralized renewable energy can be factored right from the early stages of developing new energy infrastructure to reduce inequality and provide cheaper, cleaner energy to both areas with developed electricity grids and those lacking any energy access. Working together, these technologies would catalyze the transition to green energy while increasing productivity in communities through peer-to-peer energy transactions.