Energy transition via blockchain

Is transmission and delivery necessary for renewable energy?

How decentralized autonomous renewable energy and blockchain can create transmission free vertically integrated utility industry for a global commodity market.

I. Introduction

An Overview of Electricity as a Unique Commodity

● Electricity as a commodity and product.

● Storage, grid costs, futures

Electricity is a production commodity due to its structure. Current technology to store it is not easily scaled to our distribution technology in our grids. This state of affairs makes the sale linked to consumption in most markets; nearly all electricity is sold and consumed at the same time. Our grids are built for delivery and stability, not storage.

This reality means that regular commodities are traded on global markets, grain, diesel, and gold can all be stored easily and inexpensively. We can view electricity as a product due to its delivery requirements and lack of storage. It has a commodity price, but the price is only available locally from a monopoly in most cases. Some producers are also able to purchase locally produced power, but they pay based on the local price at a discounted rate only available to a monopsony.

II. The Electricity Market Landscape

A. Global Perspective

● Exploration of the global electricity market and its dynamics.

● Examining how location of power consumption and market dynamics interact.

The intensely local monopoly market for electricity is built for stability and convenience. Monopolies trade amongst themselves, at market rates, for concurrent delivery. The market price in the UK is near to .45 USD per kw and China’s power market is around .04 per kw. The power in the UK is not aging coal fired power, and China power is not deliverable to the UK. There is no global commodity market for electricity.

Consumption of power is convenient at the location a business operates. Many businesses have off site components of their processes remotely located; Assembly plants often use steel produced from Chinese power for assembly in part due to the intensive requirements for steel, and the low cost for this in china. Office spaces use servers powered in Iceland, and clothing is woven, pieced and assembled via the low cost producers of the component parts; loom operation, and labor from low priced countries.

Businesses are very efficient at pricing their processes and looking for efficiencies. There are many examples of this. The KW equivalency for production of ethanol is one. There is a global commodity market for this product. The deliverable commodity can be assessed in a KW equivalence based on the cost of production, its marketed and delivered globally by many producers. It can in turn be used to produce KW, or for many other purposes.

III. Unpriced Externalities in Power Production

A. Environmental Considerations

● Discussion on the external costs associated with extractive power production.

● Economic Implications

● Analyzing the economic consequences of unpriced externalities in the power sector.

The power production in the UK is quite varied; with Wind and Ngas being the two biggest contributors, and nuclear the third. China uses coal for most of its needs. The UK power is low on its unpriced externalities, and China is quite high. This inverse relationship of cost to externalities makes China attractive to KW intensive industries like steel and concrete. China produced more of the worlds concrete than anyone else in 2022, and many years before. By a huge margin they are the worlds biggest producer.

The externalities of consumption as an economic analysis started, ironically, with ethanol. Thanks to Author Pigou for pointing out that lots of consumption leads to more police and jails, less work and economic input. Externalities are costs that are not present in the market price. There are externalities in production, transportation, consumption and disposal. Global warming and colonialism are in part attributable to these classifications of economic forces.

The market for power has no global pricing on negative externalities. Some authorities having jurisdiction have made choices for their consumers to reduce these unpriced costs, and introduced higher cost power to cover the higher cost of production; some have not. Our science is just now able to put a price on some of these externalities, like water shed restoration, and remediation efforts on former industrial contamination from production. Unfortunately the consumer of monopoly electricity has few choices. Just as the Londoner who is unhappy with the cost of power and cannot take delivery of Chinese power; the reverse is true. The ethical Chinese company that wishes to consume ethically sourced power cannot order London power for their business.

These infrastructure limitations define our world and obfuscate externalized negative costs on the environment.

IV. The Cost of Renewable Power

A. Cost-Effectiveness

● Exploration of the cost dynamics of renewable power.

● Cost Concerns related to time, location and markets.

● The cost of renewable power may not be the primary factor influencing its adoption.

The current pallet of ethically sourced power all has drawbacks that make it difficult to scale. Solar is a daytime provider, wind is on its own schedule and kills birds at utility scale, fusion is a great grid fit, and eternally 10 years away from introduction, nuclear thorium is close to being a viable grid solution, but is in development and subject to geopolitical brouhaha.

The technology hurdles our culture is working on can be viewed as find something to plug into a grid for mass (or district) distribution. This solution is where carbon offsets and carbon credits originated from. The primary challenges to introducing ethically sourced power can be stated as market and storage challenges. An ethical power producer needs to compete in a grid, at a price they don’t control, and storage at grid levels is catching up to our needs slowly.

So our cost for renewable power is connected to the grid it is adjacent to. The grids monopsony prices are often assisted with a forever of well intended green paper and incentives. The offset of renewable power still includes the externalities of grid maintenance and transmission, after being sold at a market price with no connection to the global commons and no relevance to world electric commodity prices.

Everyone wants solar power, but no one buys it. Perhaps grid level generation and distribution is not the best model for ethically sourced power. Its like adding boutique chocolate from a small farm into a batch of commodity produced Easter chocolate with the plastic texture. Chocolate is a commodity, but I prefer mine to taste like chocolate. Often the commodity product tastes like the dead humans from insecticides, children and slaves indentured to work, and cartels that control the flows of chocolate.

The high cost of ethically sourced power is a straw man argument. Our planet and (possibly) the business considering this choice will still be consuming power in 50 years. How is a monthly bill covering a portion of the cost of power production a good deal from a viewpoint beyond next quarters reports?

V. Earth Stewardship and Sustainable Power Use

An Environmental Responsibility

● Power Consumption as Ongoing Business Expense

● Shifting perspectives on viewing power use as a continuous business expenditure.

● Generate, store, and consume as locally as possible.

● Fungibility in Power Consumption

Developed economies mostly have less externalities in their power, and have mostly outsourced their power intensive industrial components to places without this category of economic impedance to viability. Monthly expenses for power will still be a thing in 50 years. The actual costs of a 50 year delivery of grid power will be higher than renewables without the externalities included in the math. The only thing driving grid choice in long term consumers is low capital requirements and convenience. Heavy industry aside, many electrical loads can be moved to ethical sourcing.

The buildings that house servers are an environmental model of efficiency based on how we have always done things. Most of the shiny new buildings providing these services use air cooled equipment. Air is a terrible way to transfer heat, and these buildings are amazing examples of how efficient this can be done on scale. They are built in locations with stable infrastructures, inexpensive dirt &power, and some locally available labor to operate them. They are built to operate 1950 cooling technology as efficiently as possible.

One example is a typical larger server building. Often the air stream is cleaned in filters, moved by fan energy; heated, cooled, reheated, distributed, and trimmed to room temperature requirements with outrageous amounts of energy consumed in the process. The equipment operates fans (which are replaced often) blowing the air across aluminum heat exchangers which foul with dust the filters cant eliminate. After this the air is removed by more fan energy. Perhaps some of the energy is reused…

These buildings scale to billion dollar establishments because of the convenience of a grid, and the false economies of scale being pursued for air cooling electronic environments.

VI. Vertical integration of electrical commodities

One proposed business model uses many novel advantages offered by current market technologies that are not designed to scale for grid level industrial uses. They propose to tokenize a global effort to ethically produce power for direct consumption on various sites. This model allows for renewable power to be purchased as a right to use, traded globally, and consumed at in a decentralized autonomous scale where a grid is not necessary.

This effort requires ethically sourced power to be produced locally. On site consumption will be a collective decision as to the best means to a profitable sale. This may include server hosting, hydrocarbon production, EV charging, and district electricity in rural areas. The power is consumed locally, or in a very local district in some regions. Here is a vertical integration model of power production.

It requires transparency in our production, and consumption of our product. The net profit from collective global operations will be shared among the producers, token holders, and infrastructure supporting our operations. Customers can be consumers of our product directly using tokonomics, they can also purchase or provide a renewable productive asset, and join the global market for ethically produced and consumed power.

VII. The price for responsibility produced and delivered power?

The world market price has a range of more than a 10X from low in China to High in Italy and the UK. How do we set a global commodity price for of delivered electricity? What is externality free electricity worth? What loads can be moved out of an office and powered remotely offsetting a power bill directly?

There are many industries that use electricity we can measure again. Steel is a poor choice as we do not have China’s infrastructure handy; Italy is also a poor choice, their largest industrial outputs are similarly tied to infrastructure that is not fungible. Their equipment manufacturing has a market established & metal forming (fast cars) is only a dream.

The wide spread fungible consumption of electricity on a global commons level by server hosting is an excellent fit. Blockchain is a great example. It has a low capital equipment cost, consumes electricity in relation to FIAT currency, and its a global commons commodity. Blockchain also offers transparency as a means to certify and register operational parameters like energy. Its concept of separate matching ledgers in order to participate is a fundamental principle of operations and ensures everyone can see everything. We will price the directed consumption for consumers based on this price for our server hosting and other commodity products based on this price.

VII DAPPR Model: Serving the Renewable Market

An Introduction to DAPPR

● Overview of the DAPPr model as a provider in the renewable energy market.

● Advantages and Opportunities

● ROI & lifecycle

● Innovative environmental tools

One example of a decentralized autonomous power producer in renewable power is our DAPPR unit. The prototype is a solar/wind powered island of stability in an already stressed grid ecosystem common in the sunbelt countries of the world. The units will provide 150kw daytime solar input, power storage for overnight operations, and wind energy as available. It will be located adjacent to La Paz BCS Mexico.

The first unit will include connections to the closest fiber pop, and close to real time server hosting. It uses immersion cooling to treat the ‘waste heat’ as a resource for the environment it exists in. This heat will be used for many applications, fish farming, brewing, and laundry are some examples we hope to co-locate with in future deployments for marketable reuse of our heat energy. The first unit will have domestic heat energy available for ~30 people on campus, including clothes drying and water heating as reuse opportunities. In the future a 2 step thermal/solar water distillation is planned along with hydroponic fish farming.

Our concern for the ecosystem spurred development of a novel cooling application. In a hot desert environment we are using entirely passive cooling for our energy systems container, and less than 6% of our energy is used for process cooling of our non consumed heat loads. This system is non evaporation dependent, using pump energy and a ground loop system.

This approach to private ownership of a collectively operated electrical infrastructure to create and consume renewable energy puts production and profit in the hands of individuals without the inefficiencies of corporations and grids. corporations.

The business looks like a small farm from a global commons prospective. The token consumer can direct and monitor the consumption of our KW on a contract basis, or the collective can consume the power for its profit and sharing. A customer interacts with the collective as a member of the global community with the collective via tokens. We can provide ethically produced ethanol/hydrogen/diesel by providing small scale industrial distillation equipment in regions where that is needed. This tertiary commodity will be market priced based on non extractive energy. The collective will not discriminate on how we use power, it will be used for improving the global commons we live in, including a fraction of our profits to improve the educational systems, watersheds, and regions we are present in.

In conclusion, the integration of blockchain technology with renewable energy presents a transformative opportunity for the global electricity market. By decentralizing power production and consumption, we can overcome the limitations of traditional grid systems, reduce unpriced externalities, and promote ethically sourced energy. This approach not only fosters environmental responsibility but also enables a more equitable and transparent energy market. The DAPPR model exemplifies how decentralized autonomous power producers can create a sustainable and profitable energy ecosystem, empowering individuals and communities to actively participate in the global energy transition. As we move forward, embracing these innovative solutions will be crucial in achieving a more sustainable and resilient energy future.