No More Nuclear: Japan's Biggest Utility Turns to Blockchain in Power Pivot
Inside Japan's largest energy firm, one man is looking to blockchain to decrease the country's reliance on nuclear – and prevent another disaster.
The Tokyo Electric Power Company (TEPCO) is no stranger to the risks of over-centralized energy sources.
Perhaps best known for the nuclear meltdown of its Fukushima Daiichi power plant in 2011, the largest energy utility in Japan is now looking to blockchain in an effort to prevent another catastrophe.
However, from distributed wind generation using tiny windmills to smart batteries that store power purchased when it's cheap to buy, alternative energy initiatives have historically been individual philanthropic pursuits.
Jeffrey Char, director of TEPCO's venture capital arm, though, believes blockchain can help provide a business model for these innovative ideas and, in the process, lessen Japan's reliance on centralized nuclear power.
Char told CoinDesk:
Since creating the venture capital arm in 2015, Char has publicly backed four companies: United Wind in Brooklyn, Via Science in Boston, Moixa in London and, most recently, German-based Conjoule – a joint venture with Innogy and TEPCO aimed at building decentralized energy solutions using blockchains.
And while he's also brought TEPCO into the Energy Web Foundation (designed to explore blockchain for the energy industry), he said the "holy grail" of all these projects is to have individuals create, consume and trade their own energy.
As such, his latest work – a signed memorandum of understanding between TEPCO and Grid+ – is aimed at exploring how blockchains could power peer-to-peer transactions for alternative energy sources.
"What we hope working with Grid+ would enable is that it will give us some early insight into how to deal within those limitations," Char said.
On the Grid+
Char's interest in Grid+ began more than six months ago when he offered the startup an investment opportunity. While Grid+ declined the money, it invited Char to join as an adviser, and that's where he learned how beneficial collaboration with the startup could be.
Founded in 2015 as a "spoke" of the ConsenSys production company for ethereum startups, Grid+ is currently working on a piece of hardware it calls an "agent," designed to let individuals pre-pay for energy using either ether, ethereum's native token, or fiat currencies.
By plugging ethereum-enabled devices into other smart machinery – such as the Tesla charging wall or the Nest thermostat – the company believes it can write algorithms based on customer energy usage that will allow them to buy energy when it is cheap.
Now a standalone C Corporation out of Delaware, Grid+ is preparing to raise more than $50 million in an initial coin offering (ICO) of "grid" tokens. According to Char, the goal of TEPCO's agreement with the startup is to learn about the potential benefits of ethereum for decentralizing the exchange of energy.
But it's not a one-sided agreement. Grid+ co-founder Mark D'Agostino said his startup expects to learn how to refine its algorithms for cheaper, more decentralized energy from TEPCO.
D'Agostino told CoinDesk:
Window of opportunity
While it might seem strange for an executive at TEPCO to be looking for ways to cut Japan's reliance on nuclear energy, Char made clear his investment strategy.
"I’m not a politician, so I don't lobby. I'm an entrepreneur, so I build businesses where I see problems, in order to solve those problems," he said.
"We're burning a ton of gas and oil and coal," said Char.
However, to maintain its obligation to climate control under the Paris climate accord, the Japanese government says it needs to return its consumption of nuclear energy to 22 percent by 2030, according to a Forbes report.
Between now and then, Char hopes his company's investments can help prevent a full return to nuclear without a continued reliance on fossil fuels.
That the Japanese government is largely deregulating the energy sector has already helped, opening up the field to competition that TEPCO itself has been blamed for helping stifle.
Now, Char said, all that remains between the old nuclear paradigm and the future of decentralized energy are a few technical hurdles and regulations that prevent the spread of community-generated energy.
From there, he says it's up to consumers to adopt the technology:
Fukushima image via Wikimedia Commons
Correction: This article has been updated to correct information regarding Grid+'s ICO token name.
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