Blockchain to play crucial role in switch to renewables

Blockchain technology is expected to play an essential role in the transition towards distributed, digitised and decentralised power systems.

So said Chanda Nxumalo, director at Harmattan Renewables, who spoke during the Solar Power Africa virtual conference this week.

She notes the large-scale deployment of solar energy and other renewable technologies is pushing the global economy towards a cleaner and brighter future.

According to the World Economic Forum, solar photovoltaic (PV) in particular will become the most important source of energy for electricity production in a large part of the world by 2030.

It notes the increasing volumes of embedded renewable generation, such as wind and solar PV, have led to a reduced reliance on centralised power sources and energy grids.

In doing so, the World Economic Forum says this has the potential to increase grid reliability as well as make small-scale renewable power sources a viable alternative to the aging power fleets that many African countries battle to maintain.

SA is steadily driving the use of renewable energy sources. President Cyril Ramaphosa recently said renewable energy will play a pivotal role in curtailing the electricity challenges besetting the country.

Mineral resources and energy minister Gwede Mantashe recently gazetted amendments to Electricity Regulations on New Generation Capacity, to enable municipal power generation.

The move takes municipalities a step closer to by-passing troubled power utility Eskom and procuring their own cheaper and clean electricity from renewable energy sources.

“Legacy systems are being overhauled, with energy companies implementing more reliable and advanced digital systems, particularly to improve operational efficiency and security,” says Nxumalo.

She notes this is where advances in digital technology can be harnessed to help utilities better manage their energy needs through the optimisation and digitisation of systems, as well as through the deployment of blockchain technology.

Nxumalo says blockchain, for example, enables more secure management of energy data while meeting the energy needs of smart cities of the future.

She points out blockchain will play an instrumental role in the global transition to renewable energy, which will lead to more efficient responses that will ultimately allow for optimal energy management.

“Blockchain has a number of strengths that really give it tremendous value within the renewable energy sector, including disintermediation, security, transparency and automation.”

She says the increasing exchanges between different parts of the power network have made central management and operation challenging.

“Blockchain could help address some of the challenges that decentralised energy systems face, especially to securely store digital transactions without using a central point of authority. More importantly, they allow for the automated execution of smart contracts in peer-to-peer networks.”

The Solar Power Africa virtual conference also heard that the renewable energy sector remains optimistic about the deployment of 5G, which will work to support diverse vertical applications by connecting heterogeneous devices and machines with significant improvements to the quality of service, increased network capacity and enhanced systems.

Nxumalo says this is where 5G complements the integration of blockchain technology into smart grids. “It works to support data security, as more types of data and information are communicated wirelessly between sensors, devices and instruments. Increased digitisation as a result of 5G will lead to an acceleration of automation too.”

According to Abe Cambridge, founder and CEO of the Sun Exchange, one of the biggest obstacles to solar proliferation on the African continent is limited access to traditional solar financing, especially for smaller organisations such as schools, small businesses, clinics and non-profits.

“However, the borderless nature of blockchain, digital currencies and other digital technologies are changing this and giving way to innovative solutions that unlock the full potential of solar power for the continent.”

Meanwhile, also speaking during the event, Dr Jarrad Wright, principal researcher at the Council for Scientific and Industrial Research, said with many African countries struggling to keep up with the energy consumption demands of its citizens, the argument for a move away from unreliable coal-fired power stations has never been greater.

He notes this has left many African countries scrambling to adopt more integrated energy supply and demand systems across the board, with smart technologies, partnering with independent power producers (IPPs), rigorous planning and holistic decision-making.

According to Wright, solar PV can play a valuable role in alleviating the South African electricity crisis, whether via utility-scale or distributed investments in solar PV and other technologies to assist in ensuring adequate power systems and driving electricity access.

He explains that similar principles can be applied to the rest of the African region, to ensure sufficient supply to meet ever-increasing energy demands.

“This is where solar PV should likely play a significant role, considering the lead-time for investment, technology cost reductions, availability of favourable financing, and its ability to scale up and down.”

He pointed out though that to solve Africa’s energy challenges, it goes beyond just the technologies. “Key to solving the energy crisis is ensuring enabling policies and regulations are developed with a focused and committed approach to implementation of projects.”