Providing clean water to the 780m+ people without access and 1.2bn+ who lack access to electricity is a challenging problem. It is also a major social imperative, as millions die each year from inaccess. Moreover, securing access to these essential human resources is core mechanism to reach and enfranchise the next 2 billion consumers globally, and leverage the power of economic growth to help people begin to break the poverty cycle. In short, something must be done.
Fortunately, innovative new hardware and models of distribution of water and electricity may offer an excellent way to improve access and efficiency in providing these essential resources to remote and underserved communities.
The Status Quo: Large-Scale Producers
In conventional systems such as those used in most Western, developed countries clean drinking water and electricity are produced by a small number of large, commercial utility companies, and then distributed to consumers (eg households and businesses) via an intricate, extensive grid or pipeline system of delivery infrastructure. Though this is changing, electricity that originates from large scale facilities is often generated through fossil fuels. A major issue with this approach is the vast cost of creating and maintaining the delivery and production infrastructure these models require.
Trend Towards Prosumer Production
The coalescence between a global push towards using renewable energy sources and consequent improvements in the efficiency and cost-effectiveness of water/energy production hardware have seen it become increasingly possible for individuals to produce some or all of their water/energy needs. Consumers can become ‘prosumers’ (simultaneous producers & consumers).
Over the past decade, prosumers have become an increasingly common feature of water/energy models in developed markets. In some systems, there are mechanisms for prosumers in part-production systems to ‘sell back’ their surplus water/energy to the commercial producer via delivery infrastructure.
Prosumer Production & Underserved Consumers
The trend towards prosumer production has, by and large, been a great way to increase uptake and use of renewables and more sustainable methods of water/electricity production. However, alone it is unlikely to solve the lack of access to water/energy in developing markets — particularly for underserved consumers in rural/remote locations.
At their core, prosumer part-production systems described above still rely on the creation and maintenance of large-scale delivery infrastructure through which water/electricity can be distributed. The challenge is that the substantial cost, time delay, and investment profile of creating and maintaining such infrastructure have historically been core causes of limited development. Prosumer part-production models still rely on delivery infrastructure, so do nothing to overcome this underlying barrier to improvement.
For this reason, prosumer production is a great, evolutionary step (especially in developed markets), but is not really a solution to the problem of access in emerging and underserved markets. A more revolutionary, systemic change is needed.
Distributed Prosumer Production
Distributed Prosumer Production models may be a more viable solution, and represent an evolution in water/energy production models. Under this approach, there is limited reliance on large commercial water/energy producers delivering utilities via major delivery infrastructure. Each consumer is also a prosumer — creating their own water/energy needs through their own small-scale production hardware.
This is often the case in developing markets where there is limited or no commercial water/energy production infrastructure, and/or no delivery infrastructure to reach rural and remote communities.
A core advantage with this model is that it obviates the need for substantial, (often unattractive) investment expenditure creating large-scale production and delivery infrastructure from scratch, and provides access in a much faster way than the years+ needed to create necessary infrastructure. This makes production models of this kind an especially attractive solution in developing markets, and many see this development as key to solving water/energy access problems.
Such systems are not without challenges. One is where the ‘source’ of water/energy will derive. As many prosumer production hardware systems are solar powered, the energy ‘source’ is less problematic (providing there is sufficient sunlight, though in core emerging markets this is typically the case). Securing source water can be challenging, though there are benefits associated with a more distributed model of source water capture and storage (again, including significant cost-related reasons).
One more complex challenge surrounds how, with a system of decentralised production, stakeholders are properly ‘connected’. Water/energy production involves many, varied stakeholders, who can be more clearly organised and co-ordinated where a centralised system of large-scale production exists. In distributed models, it can be difficult to connect those stakeholders effectively: for instance, linking prospective investors; those interested in ‘rights-based’ outputs (Clean Energy Certificates; water usage rights); and those interested in buying/selling surplus hardware outputs.
Those without the purchasing power to acquire their own prosumer hardware (or insufficient output from their hardware at certain times of year) remain without access or adequate supply (and cannot easily buy access to prosumers’ surplus).
Distributed Production with Blockchain Ecosystem
The upshot is that, without an effective mechanism to connect stakeholders, a wide range of value opportunities can be lost; those without access can remain without access; and the key benefits of distributed systems can be missed.
This complex challenge of creating a trustable, connected ecosystem to link stakeholders throughout the water/energy product:consumption value chain may be aided by new software technologies like blockchain. Such systems may address these problems and maximise the potential of prosumer hardware, to create effective distributed prosumer production models. In turn, such an approach may help solve the problem of access in emerging and underserved markets.
Blockchain-based systems can do so by providing a platform to securely, accountably connect distributed stakeholders to capture value opportunities, and by establishing an ecosystem to incentivise stakeholders to address challenges associated with distributed production.
Nexsis believes this approach is the future to solving the world’s water and energy access crises, to connect stakeholders via blockchain ecosystem technology, and drive ‘next generation’ production models like the below.
Nexsis pursues this approach by combining proprietary, prosumer/smaller scale hardware for water/energy production with a unique blockchain-based ecosystem to securely connect stakeholders and maximise value capture. This comprehensive blockchain ecosystem integrated cleverly with production hardware presents an even greater opportunity for a blockchain ecosystem to have a transformative effect on water/power generation systems given the synergies in design, adoption and implementation.