How Blockchain is Revolutionizing Singapore’s Renewable Energy Trading Sector
Blockchain, the technology behind the successful operation of cryptocurrency has been endorsed and acclaimed to be very profitable for operators in different areas of endeavors across the globe.
Currently, a particular Asian country is making efforts in using the technology in its renewable energy sector with the intent of increased optimization and resource management.
In a country like Singapore, firms can trade on energy shares that constitutes some percentage of green energy which is being produced; such as solar power or wind. Companies who do this, purchase these renewable energy units to balance their non-energy resources. And they can actually buy these from an organization that produces more green power.
This arrangement is similar to carbon trading. Just recently, companies have been enabled to buy and sell renewable energy on a system that is aptly supported by blockchain.
A utility provider, the SP Group that just acquired the platform stated that the new development will give room for better transparency and reduce the costs in power trading. This is because it minimizes the need to involve a unified platform to validate transactions. In addition, the company said that this could ultimately assist an international renewable energy trading.
“Furthermore, a buyer in Singapore who intends to purchase renewable energy can do so by utilizing blockchain technology solely dedicated to renewable energy trading, from a green energy producing company that is located in Laos. This process will certainly lower the cost of trading.”
Says Wong Kim Yin, CEO of SP Group, during a brief chat with CNBC at the International Energy Week in Singapore.
Initially, the high costs involved in validating energy licenses as well as the challenges in tracing energy production reduced the capacity of trading the country of Singapore. But that’s resolved now as most of the transactions are being done directly between the energy producers and buyers.
However, with the introduction of blockchain, we can expect to see significant changes in the way these energies are traded, thanks to the distributed ledger system. This will automatically remove the need for any authentication procedure on the chain, thus lowering costs and giving opportunity for small energy consumers to get involved in the process.
In his speech, Wong maintained that “in the near future, transactions in energy will be more decentralized and evenly distributed, compelled by technology and where consumers will be enabled to actively participate in making decisions.”
He further stated that
“’in the past, there were large hydro stations operating using the central platform and power could still be transmitted to the homes of consumers. In time to come, there will be solar panels with batteries and with that type of arrangement, the energy produced would be stronger.”
Options available in renewable energy are always faced with the challenges of the availability of lands in the urban areas. What this means is that, the construction of wind farms on a large scale is often an astronomically expensive endeavor –one that has largely discouraged investment. The limited number of solar systems are largely due to the unavailability of land – whether in the commercial or residential setting.
Currently, there are inventions and improvements in Singapore to float solar energy systems on river basins. If this is successfully implemented, it will help ease the challenges faced with unavailability of lands.
For now, the demand for energy is far more than its current supply.
The Managing Director at APX, Lars Kvale, told CNBC that “there is major demand for green energy in Singapore. But sadly, it is not available enough to meet the demands of consumers.”
Blockchain as a catalyst has the capacity to facilitate an international supply to meet the heavy demand and supply of renewable energy.
Lars in his address to CNBC also added that ”the possibility of blockchain and the use of technology in archiving this environmental resource offers the opportunity for these platforms to form trusting relationships with the producers of this commodity, even without re-authenticating the information’’.