[TL; DR]
The proper adoption of DePINs may help to increase the use of renewable energy sources.
Combinder has developed a model of how a DePIN energy market may function.
helium-hnt" target="_blank" class="blog_inner_link">Helium and Silencio are examples of successful DePINs operating in two different sectors.
Introduction
Blockchain technology has much to offer to the global economy apart from digital assets. It is a technology that can be used in various ways to enhance productivity and efficient allocation of resources. One of the latest innovations that encompasses blockchain technology is Decentralized Physical Infrastructure Networks (DePIN). DePINs can be used in various sectors that include the supply chains, internet service and energy industry. In this article, we discuss how DePINs function in the energy sector.
The Urgency of Transitioning to Renewable Energy
There is consensus among many international organizations, including governments, that people around the world should cooperate to prevent and reverse climate damages. For example, there is an agreement that the emission of greenhouse gasses should fall by about 45% between 2010 and 2030. Ultimately, the world should focus on achieving net-zero emissions by 2050. As long as emissions are above zero global heating will continue.
As a fact, net zero is an international goal for mitigating global warming. It refers to a situation where the amount of greenhouse gases emitted is equal to the greenhouse gases which are being removed from the atmosphere within a given period. Whereas there are various initiatives people can pursue, DePINs are one of the best alternatives for the world to achieve net zero emissions. This is because DePINs in the energy sector will promote the use of renewable energy on a large scale.
The Role of Decentralized Physical Infrastructure Networks (DePIN)
The world can achieve zero emissions if it uses renewable energy and shun non-renewable sources of power. Renewable energy is, however, different from non-renewable energy. Much of the renewable energy can only be generated at certain times, not always on demand. For example, wind energy is only produced when the wind is blowing. This applies the same to solar energy: it is only produced when there is sunlight. Therefore, for the society to meet its energy needs it may require to integrate energy consumers into the market. The only way to achieve this is through DePINs.
Basically, DePINs enable us to attain the net-zero emission goal while having an equitable and resilient energy source. With energy DePINs there is a user owned and controlled energy distribution network. Let’s demonstrate how energy DePINs work.
First, the DePIN technology leads to energy consumer empowerment. With the energy DePINs the various stakeholders in the sector and who are geographically close to each form a network for producing and distributing energy among themselves. For example, individual energy producers such as home owners and local firms form an energy market where they do peer-to-peer energy trading. Specifically, those who have surplus power at a certain time sell to those who have a deficit. Thus, this system democratizes production and access to renewable energy.
In other words, home owners develop micro-power plants that are connected to micro-energy grids. As an example, 100 households may be connected to a single energy market where the users produce, store and trade their power. In this case, there will be a need for blockchain in the energy sector to record the various transactions among members of every energy market. Thus, DePINs become part of community driven energy solutions. With this, communities will own and manage their energy infrastructure which incentivizes participation and fosters a sense of ownership.
DePINs are vital for renewable energy transition and sustainable energy systems. It is also essential to realize that the smart grids integrate traditional energy sources with renewable energy sources like solar power. The DePINs also tokenize energy facilities and some components of smart grid systems.
Read also: The Future of Decentralized Physical Infrastructure Networks
The Strategic Significance Of DePIN
DePINs embed smart contracts into the management of physical infrastructure without the need for intermediaries. This has many benefits for the stakeholders such as minimal operational costs, accelerated service delivery, enhanced efficiency and security. They also enhance transparency, accountability and optimal resource allocation.
DePINs in the Energy Sector: Why are they Game Changers?
The management of traditional energy systems has some complications. For example the power utility providers may use unfair pricing systems. As a case in point, some of these monopolistic service providers tend to charge flat fees. Also, some of their systems are outdated as they were designed for the needs of communities that existed decades ago. As such, they do not meet the unique demands for renewable energy systems. Usually, the traditional systems do not cater for users with unique needs. Now, DePINs are meant for people with common needs and preferences. Also, they are functional for locally-produced energy resources which can, however, be shared among a large number of users.
In a significant development Combinder has developed a blockchain based Green Energy Nano-grid Prototype that shows how the energy market functions. It shows how the households produce, store and distribute energy. Another significant aspect is that the home owners can adjust their energy consumption based on demand.
Read also: Constructing a Decentralized Value Network via Dual Curves
The Power of the Community
Communities played a big role when power grids existed mostly in towns and cities. During those early days there was a shortage of power infrastructure in rural areas and it was not profitable for electricity providers to supply energy there due to their sparse population. Therefore, to get electricity most communities in rural areas constructed the required infrastructure. In order to do so they organized themselves into decentralized cooperatives. The community members were incentivized to join these cooperatives by the need for electricity. Similarly, through DePINs modern communities can organize themselves to access essential services such as energy.
Successful DePINs in Various Sectors
We have DePINs that have succeeded in their missions. A prime example is that of Helium Network that has established a decentralized wireless network. It uses various facilities and equipment such as 5G, Bluetooth, WiFi, and Long Range Wide Area Network (LoRaWAN) to establish decentralized networks of hotspots that provide internet connectivity. When the users transmit data on the Helium network they have reliable communication and also get token rewards.
Another good example of a DePIN is that of Silencio, a decentralized network established to combat noise pollution. It rewards mobile users for providing data about hyper-local noise pollution. The data is used to draw up noise pollution maps which can help real estate, hotels and restaurants. Interestingly, the users mine NOISE coins when they use the Silencio apps to measure noise levels using their smartphones.
The Stakes: Why Embracing DePIN is Crucial
DePINs are a game changer as they will help communities to use renewable energy sources and efficiently allocate the available power. Without a truly decentralized approach obstacles will continue to deter the energy transition. Also, without DePINs the world may keep on relying on fossil fuels which can exacerbate the climate crisis.
Economic and Environmental Benefits of DePIN
Energy DePINs will create economic opportunities for many households that will be able to generate their energy and sell to others. As a result, both households and businesses will likely invest much in the renewable energy sector. The encouraging thing is that the economic rewards are equitably distributed among the participating stakeholders.
Conclusion
DePINs are part of a new economic model that enables households to produce and share key services such as renewable energy. They have many benefits like efficient distribution of resources, provision of low cost services and enhanced transparency. Combinder has developed a model of a decentralized energy market while Helium Network and Silencio are examples of successful DePINs.