How Can Blockchain Technology Transform the Electricity Production Industry?
One of the typical market inefficiencies that green energy producers have to constantly deal with is the cost of project financing. There are hundreds of green-energy producers around the world that are not able to fund their projects because of the high financing costs.
This situation is a great example of how Blockchain technology is not only about speculation but social purpose as well. By enabling green-energy producers to quickly access credit at reasonable rates, the Blockchain deeply contributes to the process of developing renewable energy production hubs on different countries all over the world.
Let’s go over an example to clarify how Blockchain technology can achieve this:
1 – A team of experts on green-energy production and Blockchain technology audit & review different projects that green-energy producers want to fund.
2 – If they approve its viability, the project is presented to the community on a proprietary exchange so that end-customers can purchase energy tokens directly to fund the project.
3 – The green-energy producer makes a promise on future energy production to be delivered to the exchange so that token holders can acquire green-energy at a preferential price below the typical market price.
4 – Token holders living in some specific countries will be able to use those tokens to acquire electricity for domestic use. Token holders that don’t reside on countries where the electrical grid is connected to the Blockchain, can sell the tokens at proprietary project exchanges or traditional centralized exchanges where the token is listed. With fixed token supply and growing demand based on cheaper energy acquisition through the token, the Blockchain enables energy producers, end-users and wholesale electricity buyers to purchase clean energy at better prices.
There are several projects using the typical ERC-20 tokens that use this methodology to allow end consumers to directly finance green-energy producers. Different ICOs with this business model have been funded throughout Europe, Asia, etc. during 2017 & 2018.
Just like with Ethereum, RSK enables companies to create projects like this by developing smart contracts running under Bitcoin´s Blockchain. If you want to learn more about RSK, do not hesitate to check our website, the Ambassadors & Educate Programs.