Two of the most talked-about technological and financial developments in recent years are blockchain and renewable energy technologies.
But there has not seemed to be much of a crossover up until now. Small-scale investments in renewable energy are now possible thanks to new applications of blockchain technology. Blockchain technology gives investors with over $100 million in capital the ability to invest in utility-scale wind and solar power, democratizing the clean energy market. This makes it possible for project developers to obtain a plentiful supply of funding while still enabling regular investors to profit from their investments in clean energy.
Using blockchain technology is primarily intended to make it possible for regular investors to profit from the switch to renewable energy sources. There is a large investment gap for projects below the $100 million mark because many institutional investors in the utility clean energy space are only considering projects costing over this amount. The “missing middle” market will be able to easily and securely invest in a solar farm in a different region of the United States thanks to secure blockchain technology.
Plural Energy is a US-based startup that is currently leading the way in fusing blockchain technology with renewable energy sources. Adam Silver, the CEO of Plural Energy, stressed in a conversation that the objective of integrating blockchain technology into financing for renewable energy is to enable regular investors to build a portfolio of renewable energy assets, akin to a stock market for renewable energy.
I questioned Silver about the challenge of transforming the public’s understanding of blockchain during our conversation. The general perception of this technology is that it is a volatile and risky investment, regardless of whether new coins or NFTs are introduced. But Silver noted that investors can see the wide applications of decentralized financing by disentangling the technology from the perception. This system enables smaller-scale investors to participate in clean energy financing as well as investments in tangible projects such as solar farms through a source that is registered with the SEC.
This technology could also be easily turned into carbon credits, in which investors get a fraction of a credit rather than a cash return on their investment. As noted by Silver, investing in renewable energy is now more accessible to a wider audience through the use of blockchain technology. Blockchain technology gives renewable project developers and financiers access to previously untapped sources of funding, in addition to advantages for the investor.
I went to Neil Devani, the managing partner and founder of the impact investing company Necessary Ventures, in the hopes of learning more about the relationship between cryptocurrency and renewable energy. I was curious as to what precipitated Plural Energy’s investment because I was one of the lead investors. In addition to outlining a compelling use case for closing the investment gap, Devani also highlighted the chance to combine the increasing interest in cryptocurrency use with a socially beneficial endeavor.
It is important to remember that integrating blockchain technology into the renewable energy sector has many potential applications beyond simply permitting investment in renewable energy projects. Additionally, the development of a decentralized grid and energy trading may depend on this technology. By collecting system data, blockchain technology can optimize generation on the production side of the business. Blockchain technology has the potential to play a significant role in bringing about a cleaner future for the world by merging two of the most important recent technological developments.
