The future of energy is small

I’m writing to you from a hotel room in Berlin.

I’m here at Event Horizon, which has nothing to do with one of the best sci-fi horror films ever made, and everything to do with energy.

It’s basically a big conference where they get lots of energy bigwigs together to talk about the future of the industry. They even have the CEO of the World Energy Council here.

It’s hosted in a former power plant, which is now a techno club, that has been kitted out for a conference. If you need help imagining what that looks like, here’s a photo I took this morning (the lasers never turn off).

This year, the three words that are popping up in every single presentation are:

  1. Digitalisation
  2. Decentralised
  3. Blockchain

Basically, most of the speakers really believe that a more decentralised energy structure is inevitable. A lot of them are working towards it, and the way they see it being enabled is through blockchain.

You’ll know that the future of energy is a big topic here are Exponential Investor, and at Southbank Investment Research in general.

The energy market is one of the last massive sectors yet to be disrupted by breakthrough technology.

We’ve seen the internet transform retail and communication.

We’re watching biotech and gene-editing change pharma.

And we’re witnessing cryptocurrencies revolutionise the financial system.

But the energy market is stubborn.

For decade upon decade it’s been a variation of the same old tune… “Big Oil”, gas barons, shale kings, national grids, cartels… a handful of energy overlords with a tight grip on a multi-trillion dollar bounty.

Now, finally, all of that is about to change….

The future of energy is small

One of the best talks I saw today was by Dr Hervé Touati, president of the Energy Web Foundation.

He made the case that small is getting more profitable, while bigger is getting more expensive.

What he meant by that is that all the innovation is happening in renewables, micro grids and digitalisation of energy.

Fossil fuels and big centralised power plants are not innovating as they have already reached their point of near-maximum efficiency.

Now renewables are undercutting old systems, and so they are being chosen for the majority of new installations.

This in turn leads to them getting even cheaper still because more money is drawn into them. More money equals more competition and more innovation.

We are now at a point where in many parts of the world it simply doesn’t make sense to build traditional power plants.

Your personal energy passport on the blockchain

And that industry-level innovation will soon be impacting us at the personal level, too.

That’s because these new systems are digitised. By that he means the metering and flow of energy can be read as data.

This means we can then analyse, sell and move that data.

Basically, it allows people to have their own energy passport, in the same way you may have a data passport for your phone.

This data is kept secure through… you guessed it – blockchain technology.

And blockchain technology then lets you lease this data to companies, so you can find yourself the best deals. All this can be done automatically through smart contracts.

Then, your energy bill will also just be set up as another smart contract.

And all of the above will drastically cut down on energy prices and wasted energy.

This can all work for three reasons… the same three reasons I mentioned earlier that everyone was talking about:

  1. Digitalisation
  2. Decentralised
  3. Blockchain

I’ll be writing more about what I discover at Event Horizon soon. But for now, I think I should get some sleep.

Harry Hamburg
Editor, Exponential Investor

Category: Energy

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