In 2016, the world underwent its largest ever annual increase in renewable power by adding an estimated 161 gigawatts of capacity in renewable power generation. The increased stemmed from a world-wide investment of USD $240 billion in renewable energy, marking the seventh straight year that the world’s investment in renewable power sources topped $200 billion dollars. Despite the world’s growing investment in renewable power, an estimated 1.2 billion people still live without access to electricity. Individuals without electricity must supplement their energy needs through fuel based lighting and heating. Burning these sources is not only more expensive relative to many forms of renewable power, but also results in the release of toxic fumes and black carbon, which are major contributors to local air pollution and climate change.

So why the disconnect between the world’s rapidly growing supply of more affordable renewable energy and the large quantity of individuals left relying on expensive and dirty alternatives? According to Renewables 2017 Global Status Report, the problem primarily stems from an inability of traditional electricity grids to provide power to these populations. With roughly 80% of those without power living in rural areas, it simply is technologically or economically infeasible to extend traditional grid networks to many of the residents. In cases where the grid has been extended, the added cost of additional infrastructure and energy transport waste can price residents out of purchasing power.

The solution to this problem could be Distributed Renewable Energy (“DRE”) systems combined with Blockchain technology. In short, DRE systems generate and distribute power to local users independent of a centralized grid. The systems often consist of module solar panels or small-scale wind turbines and operate on a Pay-As-You-Go (PAYG) network that allows energy users to pay for only the energy they use on an ongoing basis. In order to manage the creation of PAYG networks, several companies are now turning to Blockchain technology. Blockchain, best known for its use in cryptocurrencies like Bitcoin, functions as a public ledger that allows massive amounts of data to be securely stored and accessed by the general public without a centralized platform. According to one company’s recently released white paper, utilization of Blockchain technology can spur the development of DRE systems by allowing those seeking power generation to connect seamlessly with potential financiers on a global basis without the need for utility companies or governmental bodies acting as a central coordinator. The company’s platform aims to allow applicants, from a single business owner to large-scale communities, to propose energy generating projects, which can be viewed and approved by a community of financers anywhere in the world. Approval of a project, construction of the DRE system, and even future payments for energy use are all conducted utilizing the Blockchain platform.

While the use of Blockchain technology is originating in areas typically underserved by traditional electrical grids, proponents argue that the platform’s built-in efficiencies will result in the technology one day competing with traditional utility owned grids on a worldwide basis. In fact, some companies are already taking steps towards this goal. For example, a microgrid is currently being installed in Brooklyn, New York, which will allow users to generate and sell renewable energy throughout their neighborhood. While it is still unclear what larger role DRE systems will play in future energy networks, the marriage between DRE and Blockchain creates a new playing field for alternative energy generation and delivery.