How Blockchain Can Drive Chile’s Renewable Energy Transition

Namaste Yogis.   Welcome to the Blockchain & AI Forum, where your technology questions are answered!   As a bonus, a proverb is also included.  Today’s question comes from Fernando in Santiago de Chile, and he ask if blockchain technology can aid Chile in its transition to renewable energy?

Fernando, you came to the right place.  This is an excellent question.  I thought to myself what institution is likely to investigate this issue; thus while traveling through Chile recently I found a research paper from the World Bank titled, “Using Blockchain to Support the Energy Transition and Climate Markets:  Results and Lessons from a Pilot Project in Chile”.   Let’s go over their findings, but first a word about blockchains.

What is a Blockchain: A blockchain is a shared ledger of transactions between parties in a network, not controlled by a single central authority. One can think of a ledger like a record book: it records and stores all transactions between users in chronological order. Instead of one authority controlling this ledger (e.g. bank), an identical copy of the ledger is held by all users on the network.  Let’s examine how blockchain technology can play a part in Chile’s energy policy as it transitions from carbon-based energy and facilitates market solutions to climate change challenges.

Global Energy Transition: According to World Bank researchers, humans are racing towards renewable energy solutions.  The International Energy Agency, reports renewables account for 13% of the energy market; an increase of 24% since 2017.  However, the more insightful statistic is that from 2017 – 2024 renewables produced 70% of the global growth in electricity generation, led by solar photovoltaic and followed by wind, hydropower, and bioenergy. Why?  Industry expert say the accelerated pace of renewable energy sources is the consequence of both concern over climate change and the increased rate of technological innovation in the industry.  

Chile’s Renewable Energy Policy: Chile aspires to be a global leader in international climate policy.  The government has committed to phase out coal by 2040 and move toward carbon neutrality by 2050. Chile is on target to meet its commitment of generating 45% of all electricity from renewable sources.  Nice! However, Chile has more room to run.  In fact, some estimations suggest that by 2030 up to 75% of electric power generation in Chile could come from renewable sources. The energy transition—and the use of market instruments— may be the key to accelerating Chile’s emissions reduction targets. Chile is also exploring the development of a strategy for participating in integrated carbon markets.

Chile’s Renewable Energy Pilot Program:  Chile’s Ministry of Energy created the Public Solar Roofs Program to support the installation of PV systems in public buildings.  The objectives were to reduce the cost of operating public buildings, stimulate the market for PV solutions through the installation of solar panels, and generate free public access to information on the costs and conditions of PV projects aimed at self-consumption. Its objective was to test a blockchain-based system of certification for renewable and emissions reductions. The project installed hardware and developed a blockchain algorithm designed especially for DER installations. To validate data, project managers used a measurement system independent of the generation plant, which read multiple climatological variables, including solar irradiation. The blockchain platform records the following information:

• Geolocation in Universal Transverse Mercator coordinates

• Time stamp using Coordinated Universal Time

• Environmental data (radiation and ambient temperature)

• Electricity generation (obtained from the billing meter or data acquisition system) • Identification of the PV facility

• Media Access Control (MAC) address of the facility (unique identifier of the network device).

RESULTS: The pilot helped strengthen and develop the market for small-scale renewable energy generation, which has had difficulties taking off, by creating additional incentives through the potential sale of climate assets. The authors noted that although there are benefits to blockchain technology, scalability and replicability remain a challenge. Last, the project developed and generated a shared ledge system of relevant energy generation and emission reduction data.

Fernando, I hope you enjoyed this article about what your country’s transition to renewable energy.  I say goodbye with a proverb from Chile, “words are like the wind, they can carry good or bad seeds”.

Until next time,

Yogi Nelson