Energy is a topic that fascinates and it's something I like to discuss. Despite not being a specialist in that area, I do have a relevant background that allows me to formulate some ideas that, in my biased opinion, are worth discussing.
I have a major in chemical engineering and a specialization in alternative energy sources and, even though I ended up switching careers to project management, I still have a genuine interest in themes pertaining to energy generation and distribution.
The Kardashev scale measures a civilization's level of technological advancement based on the amount of energy it is capable of using and, according to it, the more energy sources a civilization is able to harness, the more advanced it is, technologically speaking. That's just to illustrate how important energy is to our modern society.
This weekend, I actually witnessed firsthand just how important energy is and how a community can quickly fall apart when it is denied access to this important resource. Not me, only, but literally millions of other people who live in Sao Paulo, the biggest city in Brazil and one of the biggest in the world, for that matter.
The city was hit by a tropical storm and the heavy rain plus the 100 Km/h gusts of wind took down a number of trees all over the city, dealing serious damage to the energy distribution network.
Now, before going on, there is something important that needs to be understood about energy distribution in Brazil: it's completely centralized and run by companies that hold a monopoly in the region that they are responsible for, which means consumers are not allowed to choose their energy provider because there is only one.
I will not delve deeper into the reasons for that and I do believe it's a system that's common in other parts of the world as well, so it shouldn't be too hard to understand.
Getting back to the central topic, the centralization that results from this system is that after the storm hit some places in South-eastern Brazil this past weekend, over 2 million houses had no electricity for nearly 72 hours.
As I have already been told by some fellow Hivers, this is nothing in some parts of the World, and I'm truly sorry that people have to deal with days, if not weeks, of power outages in other countries, but my whole point is that, for our standards, 72 hours with no electricity is a lot.
To be fair, the climatic event that caused the problem was unprecedented but the situation was aggravated by the fact that the entire city was dependent on a single company to fix all the locations where the grid was damaged before power could be re-established. And what's even worse is that the company in charge doesn't exactly do a good job.
Decentralized energy generation
The idea of a decentralized energy model is based on having several production facilities closer to the site of energy consumption as opposed to the more common centralized model, where a few production facilities are located far away from the consumption site.
That last system not only contributes to the creation of monopolies but also creates a lot of inefficiency due to, among other sources, the losses inherent to energy distribution caused by Joule heating.
So, how could we change this scenario? The answer is decentralization.
The advance of technology is making it progressively easier for people to have their own small generation units. If we could get enough of those units spread around cities, the grid would rely less on a few big generation units of the centralized model and more on the many distributed units over the area it covers.
Of course, there would be a transition period where the "main" grid still exists and is gradually taken over by the distributed grid as it gets built.
Tokenized energy
This idea of a decentralized energy model has a powerful ally in blockchain technology and tokenization.
Blockchain provides a decentralized and fully transparent ledger where all the data pertaining to the model can be stored and easily accessed by anyone on the network and tokenization allows the creation of an economy based on energy generation and consumption.
Imagine, for example, a situation where a user of the grid could "sell" any energy surplus that they generate back to the grid and be rewarded in cryptocurrency or use said cryptocurrency to buy energy from the grid in case their consumption exceeds their generation capacity for whatever reason, or they have any temporary issues with their unit that stops them from generating any energy at all.
Sure, the challenges are many. There are technical barriers to be overcome, political issues that would need to be addressed and even cultural and behavioural traits that would require adaptation, but I fully believe this model could work and not only that but also be much more efficient than what we currently have.
Final thoughts
Decentralization can be beneficial to many aspects of modern society and it goes way beyond the internet or blockchain projects.
Energy generation and distribution is a fine example of something that can be completely disrupted and improved by decentralization. Not only can it be made much more reliable, it can also be cheaper and fairer to consumers.
Blockchain and tokenization are important allies in this proposed decentralized model as they bring transparency and enable the creation of an economy for trading energy in and out.
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