Taking Back Power: An Upstart Government Plans to Tokenize Energy

Catalonia is continuing to test the boundaries of centralized power in Spain, this time with the help of decentralizing blockchain technology.

Despite the police crackdown that followed last October’s failed bid for independence, the Catalan Government plans to airdrop an energy trading token to people in the northeastern Spanish region. The plan is to incentivize solar power generation by circumventing rules inhibiting its adoption made by Madrid.

Peer-to-peer energy trading in Spain is limited by rules preventing consumers who produce solar energy (known as “prosumers”) to sell their excess power back to the national grid or share it with other users.

However, this debate goes way beyond Spain’s torrid political climate. Highly regulated energy markets around the world appear to be embracing a wave of disruption in the form of renewables and innovation, but the big players are also stymying the democratization of energy.

Restricting the sale of excess electricity back to any national power grid makes rooftop solar much less attractive – when it could be bringing down people’s bills and making the planet greener.

Lluïsa Marsal, the technological innovation lead at the Catalan Institute of Energy of the government of Catalonia, is overseeing a creative project that dodges legal and economic limitations on sharing and trading self-produced energy.

The solution involves an “ION” crypto token to vitalize community-managed micro-grids (groups of distributed energy resources, such as rooftop solar generators which can connect to the main grid or operate in “island mode”).

Llacuna stressed the token was not conceived as a challenge to Madrid’s authority, but rather to ensure that energy trading is attractive to consumers.

She told CoinDesk:

“The token has nothing to do with independence. It’s an energy token to manage micro-grids.”

But in order for those micro-grids to be free from the legal and economic constraints which limit their appeal, they have to be isolated from Spain’s national grid.

“This way, the trading is not with the utility company but between the peers of these solar communities. The ION token powers all the transactions within micro-grids,” said Marsal.

Power to the people

The ION token and wallet will be completely open and public and based on the ethereum ERC-20 token standard, Marsal said.

Rather than being sold to raise funds like an ICO token, it will be given away, or “airdropped” to use the common parlance, when users sign up for the project and install their ION wallet. Quantities given out will vary between 100 to 5,000 IONs, depending on the user’s engagement.

The wallet is still under development and no code has been released yet. The plan is to start in approximately two months from now with a pilot scheme covering five municipalities in Catalonia.

Ultimately, there will be 8.418 million ION distributed; this is to mirror the power in kilowatt-hours (kWh) per year produced by Catalonia’s combined nuclear power plants, said Marsal…

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