Intellectual property attorneys Whit Johnson and Elliott Williams and energy attorney Morten Lund co-authored an article for Renewable Energy World titled “Blockchain + Renewables = Red Tape?,” published March/April 2018. The authors discuss two examples of how the new virtual frontier of blockchain technology, cryptocurrencies and tokens might be applied to transactions within the renewable energy market and, for each, what forms of existing or new regulation might apply.
The authors look at electric vehicles, which if they sit idle during the day, represent significant battery storage capacity that could—through small transactions for which blockchain provides several advantages—impact energy patterns. Transactions of this type could be subject to utility, securities and Treasury regulations; and taxation. They might also raise concerns with environmental regulators about the increasing amounts of energy needed to operate some types of blockchain.
The authors also examine the renewable energy certificate (REC)—a tradable, legal instrument representing the environmental benefits associated with one megawatt hour of electricity generated from a renewable energy resource—the authenticity of which would be boosted for buyers by the use of a “blockchain for RECs.” Blockchain for RECs would be subject to state and federal environmental standards, Federal Trade Commission standards for using the label “renewable energy,” and state rules requiring truth in advertising.
The authors conclude: “This article’s attention to red tape and other obstacles should not overshadow the fact that blockchain + renewables = enormous opportunities for new markets and new ways of organizing power transactions. As the California Gold Rush opened the American West, and as the Internet opened virtual frontiers, we are confident that the blockchain frontier is opening new opportunities in renewable energy that can be successful in the near future.”