Web3.0 innovation incubation platform Future3 Campus DePIN track phase 2 is still recruiting! Click the link to register: https://tally.so/r/mYQpEB
Want to know more about DePIN's application? Let's take a look at how DePIN works in the power grid system. The following is translated from the Coindesk article "DePIN Can Rebuild the Grid From the Bottom Up", written by Mahesh Ramakrishnan.
Original link: https://www.coindesk.com/opinion/2024/06/28/depin-can-rebuild-the-grid-from-the-bottom-up/
From Thomas Edison lighting up the world's first electric light to Thomas Savery's steam engine that pioneered the Industrial Revolution, energy innovation has always been the key force in the United States' leading scientific and technological progress. However, while energy innovation is still in full swing today, the parallel energy storage issue is increasingly being neglected.
The U.S. power grid system is as old as ever, with up to 70% of the power lines having been in service for more than 25 years, far exceeding their designed lifespan. Today, the United States has the highest number of power outages in the world, causing billions of dollars in huge economic losses. Take Texas in 2021 as an example, the power outage caused by the surge in electricity demand directly caused heavy losses of up to $80-130 billion.
As the U.S. government prioritizes spending on computing infrastructure over electricity infrastructure, some innovative organizations have emerged. They optimize existing energy capacity through demand response programs and the issuance of behavior-related credits (such as carbon credits). Whenever the grid is overstressed, these demand response programs will quickly activate and incentivize customers to shift peak electricity consumption during low-demand periods to ensure power supply. Usually, these demand response programs need to be completed manually with the coordination of emails and automated call systems.
However, despite the huge potential of demand response programs, their implementation has been minimal so far. According to the U.S. Energy Information Administration (EIA), these programs only save about 29 GWh of electricity per year, which is equivalent to saving only about $150 million in energy costs, less than one millionth of the total energy consumption in the United States. In response, the U.S. government has tried to stimulate the development of these programs through subsidies.
Opower, the only customer of the U.S. government, was acquired by Oracle in 2016 for approximately $600 million. It has saved more than $3 billion in energy costs by encouraging homeowners to reduce energy use through email slides. However, Opower's solution is essentially to encourage users to understand and change their electricity usage habits through education, which does not solve the fundamental problems of the power grid, namely insufficient data availability and lack of remote control capabilities.
Demand response is limited by the available data and the speed at which people respond to physical incentives. Currently, energy data is stored in isolated systems maintained by more than 3,000 utility companies in the United States, forming data silos. Since most of these companies rely on Excel spreadsheets for data processing, it is difficult to establish indicators around real-time energy consumption, which in turn affects the ability to respond quickly to changes in energy use. In addition, the implementation of demand response is highly dependent on the active participation of households. If no one is at home, then even if a response call is issued, no substantial energy-saving actions can be achieved.
Blockchain offers a perfect solution to the data availability problem. Distributed ledgers can consolidate energy data from utilities to build an accurate picture of the health of the U.S. energy grid. This not only helps utilities store their own data securely, but also allows them to share that data with other utilities and the government without revealing sensitive information. However, since these giant monopolies receive a fixed 10% return on equity from the government each year, they often lack a strong incentive to promote such innovation.
Fortunately, a massive change is underway in the hardware space: The rapid growth of distributed energy resources (DERs), such as solar panels and charging stations, is creating an opportunity to reshape the U.S. energy grid and incorporate powerful new technologies. At the same time, the combination of DERs with blockchain and cryptocurrency is giving rise to a new network of interconnected energy resources to increase data availability and enhance the coordination of resources. For example, networks such as Srcful, Daylight, dClimate, and Glow have built a real-time data layer to map energy use across the country through direct integration of sensors with solar panels/batteries. For companies like Glow, they can use this data layer to allow users to create their own carbon credits; for companies like dClimate, this data layer can power their powerful predictive models, enabling them to make extremely accurate predictions.
Companies like Srcful and Daylight use the data layer to introduce programmability - in addition to sensors reporting energy usage, they can also adjust energy usage, not only limited to sensors reporting energy usage, but also realize dynamic adjustment of energy usage. Today, smart home applications have given users the convenience of remotely controlling energy usage, such as controlling the lights at home from the office. This new infrastructure will give rise to a rich variety of new products and unique economic value. With a real-time data layer and virtual control of home appliances, companies such as Srcful can build automated demand response functions that are not only responsive, but also host control rights for users and are rewarded with stablecoins or cryptocurrencies. It is worth mentioning that because the data layer can verify energy savings and optimization in real time, these results can be monetized through municipal governments.
With the proliferation of smart home applications and the increasing maturity of the blockchain-based data layer, all the conditions needed to build large-scale demand response programs are now in place. These decentralized generation networks (DeGENs) build a programmable, mappable grid that benefits from data availability and automated responses. DeGENs can capture grid problems in real time and quickly resolve them through commissioned software, which will greatly reduce the frequency of power outages and further optimize regional energy pricing.
The utility and energy industries have long suffered from over-regulation, as the financial costs of the grid are often shared by society, while the profits flow to a small number of companies and traders. Due to the lack of sufficient available data to understand and solve ongoing problems, arbitrage opportunities in energy markets are common, driving up energy costs and concentrating profits in the hands of a few. In contrast, DeGENs create economic value through collaboration and return that value to participants, potentially ushering in an era characterized by collaborative capitalism.