The company began to use blockchain to link business buyers of energy – companies that buy electricity – directly with the producer, after striking a deal with Elering, one of Estonia‘s independent electricity and gas system operators. The idea was to use energy ‘tokenisation’ – by linking energy consumption and production data to the blockchain, in an attempt to digitise the country’s energy sector. Now the pilot project is yielding its first results.[...]
The bulk of energy in the Baltic country is produced by fossil fuels – only 18 per cent come from renewables. The main aim is to test the limits of what’s possible with blockchain technology, says WePower’s CEO Nick Martyniuk. At the same time it is trying to increase the percentage of eletricity generated from renewables. “Even though the cost of renewables has dropped significantly, small to medium size companies don't have a good way to start buying green energy.[...]
It's not clear, though, that scaling up will actually work, as it would mean using blockchain technology for data that is flowing at high speed and in huge volume. One concern is transaction capacity: WePower mainly uses the public ethereum blockchain that applies the so-called proof-of-work (PoW) approach that requires a lot of energy and computing power that only professional ethereum miners can provide (although ethereum may at some point switch to the environmentally-friendlier and easier “proof-of-stake” approach). So PoW means the transaction capacity might be limited, says Fei Wang, senior research analyst at Wood Mackenzie, energy research and consultancy firm. “This may not be an issue during the pilot phase, but this would be a hurdle if the project were to expand to a full commercial deployment.”
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