Taking Back Power: An Upstart Government Is Planning to Tokenize Energy

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.

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

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.

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.

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

In terms of how the token will work in the hands of users, the system will use an average measurement of kWh in solar power usage and when someone uses more than average they pay for the excess in crypto tokens; if they use less they are rewarded in crypto.

James Johnson, CEO of Open Utility, a peer-to-peer energy marketplace in the U.K., sees tokens as an interesting replacement for feed-in tariffs, subsidies designed to help accelerate renewable energy technologies.

"A token could count in the same context if there are enough people willing to buy into it, because they saw the value in taking power into their own hands, figuratively speaking."