Q&A: Blockchain has the power to shake up the energy market

Bitcoin has fostered a reputation for consuming a lot of power — but in an interesting twist, blockchain technology could also play an instrumental role in delivering a greener future.

We spoke to David Duckworth, the CEO and founder of Rowan Energy, to find out how his company is using blockchain to tackle the flaws that exist in the energy sector… and make installing solar energy infrastructure more financially feasible for consumers.

1. Firstly, what exactly is the Rowan Energy blockchain?

Rowan Energy is a new breed of energy company that aims to change the way people buy and sell their energy. 

Rowan's roadmap is a four-phase plan, with the end goal being a fully licensed utilities company completing the loop between rooftop solar, battery storage and electric vehicles. 

The future of energy production and consumption is peer-to-peer energy trading between households. For this, Rowan had to attract tens of thousands — if not hundreds of thousands — of customers with rooftop solar.

2. What are the benefits for customers who get rooftop solar installed?

Currently in the U.K. there is no financial incentive to invest in small solar infrastructure. The best feed in tariff for energy fed onto the grid is 5.5p per kW/h. Depending on who your equipment supplier is, it could take you thirty years to recoup your investment, which is longer than the panels are expected to last.

By combining the best of carbon offset and blockchain, Rowan is able to offer 10p per kW/h produced by the rooftop. This does not affect the customer’s feed in tariff and they will not currently have to change suppliers. Better still, it can result in ROI in as little as three years.

3. How are consumers rewarded for the excess energy they produce?

This is a good point! Rowan Energy rewards customers for all the energy they produce, not just their excess energy that’s fed into the grid. We are happy that the homeowner uses the energy locally. This means it's not being pulled from the grid, which results in less energy being produced by burning fossil fuels.

4. Many blockchains use a lot of power. How do you get around this?

Rowan Energy built its own chain from the ground up. We could not justify using an energy-hungry public chain. Our blockchain uses the proof-of-authority (PoA) consensus which means it’s low powered and therefore low carbon. It was designed to run on a Raspberry Pi. 

We have also developed a piece of hardware called a Rowan Smart Miner. This small device sits in a customer's property below their solar inverter. This device counts the energy being produced by the panels and also validates transactions on the chain, so it’s a smart meter and miner in one.   

5. How does the process of selling energy to a neighbor work?

From the data collected from the roof generation, Rowan mints renewable energy certificates (REC). 

This is similar to an ERC-721 token, except it’s on the Rowan blockchain. For excess energy fed into the grid, the homeowner will get a REC token. These tokens are sold to consumers via our automated energy trading platform. It’s a simple algorithm fulfilling two needs. How much energy you require, and who has produced this locally to you. 

6. The costs associated with installing solar energy can be off-putting. How do you get around this?  

This is a common misconception. If you get solar installed by one of our competitors, it can be a lot of money and you may never recoup that investment. With Rowan and its distribution partner Ecocute, you should recoup your costs within five years. 

7. Why is this blockchain solution needed?

There are several reasons blockchain is needed in this case. With the reward points offered to solar owners, blockchain is ideal for this kind of transaction. 

Secondly, due to blockchain’s immutable design, Renewable Energy Certificates can be confirmed and validated on-chain. They can never be copied or the data cannot be changed retrospectively. All of this is key to a carbon offset product where double counting is a big no-no. 

Our currency RWN is used to secure those transactions lowering the chances of fraud in the system. Energy will also be traded using RWN as the base currency as well as payment for the REC certificates being made in RWN too.

8. What are the flaws that currently exist in the energy industry?

The biggest issue is greenwashing. Some major energy companies buy their energy from the cheapest source, coal or even diesel power stations. Then, they buy renewable energy certificates from a large solar farm. They then couple the dirty energy and the certificate and sell that energy to the general public as clean green energy. It’s an absolute disgrace. However, with Rowan Energy,  a consumer can look at their Rowan dashboard and see where their energy is being produced in almost real time.

9. Can businesses benefit from this infrastructure, too?

Yes, in the future absolutely. Firstly, if your business has solar and it is less than a 50kW/h system, you can earn Rowan Rewards for the energy you produce. 

Secondly, you can buy your energy from a locally verified source. 

Thirdly, over the coming months, governments from around the world will start to enforce strict carbon targets for businesses — and hand out fines when they do not meet those targets. Businesses will be able to source carbon offset certificates from Rowan knowing they are produced localled and ethically in the UK. According to the Financial Times, the carbon offset industry is on the path for massive growth.

10. What are your goals for the next 12 months?

Firstly we need to complete our beta launch, this is 50 houses (we already have 20 houses) fitted with a smart miner. This launch is to make sure our business model works, and our platform is bug free. From here, our rollout will expand.