I recently read an article on the energy grid of the future that introduced the idea of the “prosumer” – when people are both producers and consumers of power. It talked about how people will be able to use decentralized microgrids and not be dependent on centralized grid infrastructure for their energy needs. But if you look at the villages in rural India, Bangladesh and Africa, they seem to be already doing that.

Innovation in the Himalayas

Global Himalayan Expedition, an Indian social enterprise, is working towards providing energy access to remote mountain communities. They are moving villages away from kerosene (pre-Industrial Revolution) to the technology of the Fourth Industrial Revolution, using decentralized microgrids to power up houses with the latest LED lighting technology. Compared to cities, the villages are technologically more advanced. Utilizing DC (direct current), the villagers are able to generate electricity with a small solar panel and battery; enough energy to power up 10 LED lights, one street light, 1 LED TV, 2 fans and mobile charging-points. This load is less than a single tube light shining in a New York subway station. That tube light illuminates a small area in the subway station, whereas the Himalayan villager is lighting up his or her entire house, between six and eight rooms, and the streets outside with the same energy consumption. Don’t be surprised if the villagers say they have more advanced lighting than a New Yorker.

With the focus on renewable energy and a more sustainable way of feeding our energy needs, net metering comes along as a very viable option to promote renewable energy usage and the microgrids in the urban scenario. Net metering allows people to feed energy back into the grid system, if generated using renewable energy, thereby causing the electricity meter of the house to run backwards, resulting in less expenditure on energy consumption. This reduces the stress on grid infrastructure and incentivizes the use of renewables, given the recent solar innovations and drastic price reduction in the cost of energy generation using this source. India has been able to achieve a smaller price per watt for solar than coal. Who could have imagined that 10 years ago?

Sharing electricity on the blockchain

Imagine a world in which houses can share energy between themselves. If you are producing excess energy, you can sell it someone within your locality who has a demand for more, maybe because there is a party at their home or they have guests so they need extra heating power. This energy-sharing will revolutionize the sector as we know it. If you are on vacation, you can sell all the energy being generated by your setup to the entire community, earning money while you’re away. Sounds like science fiction, but this is where blockchain can transform the decentralized power generation. If everyone in the same community is connected together at local level, when one owner produces more electricity because of excess production from his solar panels or less usage in the house, he can potentially sell it to a neighbor.

The grids can be connected to each other on the cloud into a virtual microgrid, with a real-time exchange of energy that guarantees local production is consumed locally as well. Blockchain allows transactions between these consumers to be settled through “i-contracts” (intelligent contracts) that can choose where customers buy excess energy from and how much they buy from each different producer; those transactions are registered on the blockchain. This transaction is available to all the people in the blockchain network and makes sure that two different people cannot claim the same unit of energy produced and the corresponding monetary compensation.

Image: Global Himalayan Expedition

Blockchain apart, this is all being done now at some basic level in the villages of Bangladesh. Some companies have installed nanogrids allowing individuals to share their electricity with roughly a dozen other homes, some of which are equipped with solar panels. Since the equipped homes often cannot even store all the energy they produce, while others don’t have access to electricity at all, a few companies have come up with a solution that allows users to resell their excess energy to their neighbors in a peer-to-peer way. The transaction is done through mobile-based payments, and a digital system records transactions from one house to the other.

Don't put your power in one basket

During the recent hurricanes that impacted several nations across the globe, the first thing to get cut off was power in the cities, because traditional grids are not resilient against extreme weather. Puerto Rico is still cut off due to the central grid failure in the recent hurricane, knocking out electricity for more than 1 million residents. Microgrids offer a much better solution in that they are isolated systems and so only the worst affected areas will suffer a power outage; the rest of the city can function with available power, since it is being generated on-site. And then there is discussion of how the next war is going to not be fought with guns, but on the internet; this makes our grid systems susceptible to cyber-attacks, taking down the power of an entire city or state. But stand-alone microgrids are insulated from such attacks and show more resilience vs the traditional grids.

Image: Global Himalayan Expedition

Going forward, there needs to be a very strong regulatory framework that promotes the use of microgrids using renewable energy at consumer level, thereby reducing the load on the central grid system and paving the way for a more sustainable form of energy generation. The relationship between the microgrid and the public grid needs to be clearly outlined, with the latter taking into account how much energy generation is happening at microgrid level so that planning for energy generation can be done accordingly. This has to be multi-stakeholder approach for a win-win scenario, otherwise it will be a futile war of microgrids vs public grids where no one profits.

No aspect of the Fourth Industrial Revolution should be more human-led and human-centric than the future of energy. Access to energy is able to empower human beings to do the inconceivable; it serves as the base of the pyramid on which other foundations of education, health and employment can be built upon. It provides basic human dignity for people to be able to see their food they eat during night hours. The good news is that all the advances made in the field of energy are only going to accelerate our mission to remove energy poverty from this world and turn the number of 1 billion people without access to zero. We live in a digital world, and our target is to have zero people without access to this basic resource.