Blockchain Industrial Revolution in Africa
(III)
“Our products and services are better than the competitors”
That’s what they always say. The new guys whenever they come into the market. They always claim to have a faster, cheaper, better quality and so on just to lure customers and make a great first set of sales. But then, it becomes clear, they are either no different or even worse. Experience gathered over the years can’t be compared or easily acquired by a new startup. Yes, they may have learned to make some things differently in most cases, or in few instances, they have learnt to correct most of the anomalies in the versions of the competitors. But it’s just their words you will have to take, unless they were able to subject themselves to a certain mechanism that penalizes them if they aren’t as advertised or some conditions in their promises aren’t met.
I will be painting the picture for an idea that depicts this in this article. The giant African company that I have chosen as the next out of the hundreds happens to be a perfect subject. Our subject company was established in 1923 and has been known by all to be the largest supplier of their services in the whole of Africa. Majorly situated in South Africa and known to be the largest of South Africa’s state owned enterprises
ESKOM
Kimberly, the capital and largest city in the Northern Cape Province of South Africa was the first to use public electricity when electric street lights were first installed. The major purpose for this was to control crime at night. This was done in 1882, and then followed by Cape Town in 1895 with the construction of Graaff Electric Lighting Works to power 775 street lights. In the history of every invention comes a story of the dire need for it to solve a problem concerning a lot of people.
Although Eskom was founded in 1922, but wasn’t fully attributed to the name till 1987 and has been evolving ever since. First from the coal-fired 128 MW station in Witbank completed in 1935 to the first expansion when the supply was increased from 4000MW to 40000 MW between 1960 -1990 and then to the nuclear power plants plan to combat the energy crisis and increase supply to 1000GW by 2050. This so far has been a tremendous journey filled with lots of achievements up until recent years.
Just this year, the President of the country announced that the government will be splitting the company into three different and distinct state-owned entities. These entities will be focused on generation, transmission and distribution to better manage the serious operational and financial problems facing the company. Their sales have been declining by 1% per annum and the less it sells, the higher the tariffs it wants. At the time the speech was delivered, the debt was already at 30.8 billion dollars whereby there wasn’t enough revenue to make debt payments. To assist, the government announced the provision of US $5billion loan to stabilize the company for the next 3 years and their analyses says they won’t be able to survive the next 3 months.
I don’t know much about most other countries, but speaking from experience, an average African man would know a whole lot have gone wrong here. This is my own personal view though. In situations like this, I tend to query mismanagement of funds, personalization and selling of state-owned facilities, hidden powerful undue influences targeted towards a possible hostile take-over among others. Funny actually the metaphorical connection; the electric streetlights was commissioned to curb crimes and thefts at night and blockchain provides among other solutions, a transparent system which curbs crimes and hidden ulterior acts circuitously. To truly solve financial crimes among other related transgressions, things needs to be done transparently in the open where all concerned parties will be able to view and query the moment something feels wrong. That is where the blockchain comes in.
IDEA 4
There already exists a couple of existing practical use cases for blockchain application in the energy sector. Most are just ideas on papers of course but with a high tendency of success with determined and good team. This entails the use of smart meters to enable end users to pay for electric power supply in adequate quantity as using smart contracts and measured usage from the source without the need for middlemen. Most of these ideas of course still follows the old scheme of pay and enjoy services with few imposed difference of the blockchain transparency and ease of transaction and nothing more.
According to research, energy waste is a serious issue especially in the US considering 66% of the produced energy is wasted. This could have been a certain percentage of the returns for the country if sold to the neighboring countries in need of the supply; just saying. There are several programs designed to curb this, part of which is but not limited to the “demand-response utility program” which direct the power supply to the required locations across the grid based on the expected need and time of the household. This is usually a necessity in areas where there is a huge demand for power supply that often result in brownouts or worse, blackouts.
The US electricity wastes alone now totals $130 billion in energy that is billed for and expended but not used. This is the national debts of some African countries combined. One way a smarter system of consumption has been established is through tokenization and trade of energy. This makes it easy to exchange energy between supplier and consumer and also consumer-consumer exchange as it can be classed as a tradable commodity with per-unit value. There has been a couple of companies attempting to solve this problem for broad adoption such as Grid+, MyBit, WePower among others each focused on green energy.
Another existing approach is the use of micro grids to solve the identified problems in the grid system that wastes 7% of produced energy in resistance and when combined with other losses can increase to 15% which accrues to USD $70 billion annual losses. Microgrids focused on localizing electric grids with the use of blockchain to monitor consumption and execute energy transactions. There are also vast numbers of innovation using the blockchain to solve issues in the energy sector, more of which can be found here.
My own idea for approach is (A) to:
1. Lease free lands in less congested areas and roof-tops in congested areas for power supply projects
2. Build micro grids in such areas where renewable energy sources have advantages.
3. Prepare a token remuneration plan for leased spaces where a certain percentage of the generated energy in token value is transferred to their meter wallet to be used for free power supplies.
4. Connect the nearby shelters to the supply, services of which will be paid for depending on usage using the smart meters.
5. Based on the demand in certain areas, increase the micro grid productions.
6. Give chance to individual investors to procure the facilities to supply power supply to some areas to reduce effort in monitoring and increase returns from percentage profits and maintenance services.
The other approach will be to (B):
1. Facilitate the construction of main grids supply from renewable energy in certain congested areas to reduce losses to resistance. This can be achieved by either constructing newer ones or transporting the older ones to new locations to reduce the span of supply cables and reduce resistance losses.
2. Focus on the use of smart meters to channel energy supply based on requirements in various locations.
3. Implementing a blockchain voting system to reward energy enhancement projects using lightweight contracts which will be monitored by the people/end users.
4. Install nodes in every facilities and introduce incentives to enable forging which includes encouraging 24/7 power demand and keeping account with forging balance.
5. User damage control and remuneration program; this is a blockchain insurance program for end users which utilizes lightweight contracts to remunerate high tariff payers for events such as blackouts, high/low voltage supply which can cause damage to goods, house etc. This is a step ahead of competitors. The remuneration is best issued in tokens to be used on the meter for energy payment which can also be sold to other customers through P2P transactions.
Of course, both ideas can be combined and enhanced in a way if all the information is made available and put together. Situations or use case as outsized as this will require a fully scalable platform, secured and tested. This can’t be found with most hyped platform of today claiming to be capable achieving what they can’t. Blockchain provided solutions are of course limited, but even more limited with half-baked, undeveloped platforms with great commercials. Great ideas with the intent of providing solutions for the masses by default require a great platform such as the Ardor blockchain with several years of success experience. If you need your initiative to be a success from launch, free of bloat, with several enhanced innovations and highly secured, then look no further than Ardor Blockchain-as-a-service platform.
Further reading:
https://en.wikipedia.org/wiki/Eskom
http://www.eskom.co.za/OurCompany/CompanyInformation/Pages/Company_Information.aspx
https://victormatara.com/list-of-top-500-companies-in-africa-2018/
https://www.disruptordaily.com/blockchain-use-cases-energy/
https://www.nrg.com/business/all-products-and-services/demand-response.html
