California wants to secede, with blockchain it just may

There has been ample talk in recent months that California, largely a Democratic stronghold, should consider seceding from the US. following the results of the November U.S. Presidential election. Perhaps it should secede, just maybe not the way one would think. If political rhetoric moves beyond just words and government decision-making really does go back to the states under President Trump’s administration, then California, a state historically a leader in change, and an early adopter of new technologies, especially as it relates to clean energy innovation, can truly give power back to the people and secede, at least from an antiquated power grid that is not able to sustain either current or future electricity demand. 

While the idea of completely becoming independent of utilities makes for a great headline, the truth is we do still need utilities - just not in the same capacity. This presents opportunity since the role of the utilities is changing amid growth in microgrids and the modernization of a more digitalized power grid. Preparing and adapting to this change could lead to louder support for the growth of blockchain based peer-to-peer (P2P) energy market in California, similar to one presently being tested in New York via the Brooklyn Microgrid (BMG) project

Through the BMG project, consumers are becoming more active participants in the grid while utilities are being forced to act less as providers of electricity and more like gatekeepers of energy that enable microgrids (thus utilities still maintain and operate the power grid). This leads me to suggest that as a result of competitive solar solutions, an increased number of Californians will install solar panels, participate in a more transitive P2P energy market and move away from the utility model in order to help lower electricity prices. While consumers stand to capitalize on the advancement of a P2P energy market, this is also an idea that could benefit Silicon Valley companies who are focused on cleaner energy solutions, corporate social responsibility (CSR) and listening to shareholders who are demanding corporations move away from fossil fuels. 

Exploring non-fossil fuel power potential that results in more independence from utilities through a P2P energy market could be great news for Californians considering the state has a major energy problem. California already imports 25% of its electricity or roughly 6 to 9 gigawatts from the Southwest and Northwest. Now California is expected to see its population grow from 38 million to 55 million by 2050. Suffice to say, addressing the state’s energy infrastructure and power grid is critical since a rising population means California needs modern answers to a power grid that is already unstable, despite sporting some of the highest retail electricity prices in the country. Let’s be clear: renewables alone are not the answer, but they can be greatly used to offset fossil fuels, especially as advances in energy storage make solar and wind power less intermittent. 

Speaking of intermittency. California needs to expeditiously find new ways (i.e. through a P2P energy market) to bring clean, stable energy back to its grid, especially through microgrids that can be resilient during times of crisis. Greater use of renewables and technology could be the answer as California looks to offset lost 2,200 megawatts of electricity (enough to power 1.4 million homes) from Southern California Edison’s San Onofre Nuclear Generating Station (SONGS) which has been shut done since 2012. Also Pacific Gas & Electricity’s Diablo Canyon will retire its two reactors - that’s another lost capacity of 2,160 megawatts of electricity (enough to power over 1.7 million homes) in 2024 and 2025 respectively.

Solar power could help offset the demise of California nuclear power, especially since the state is striving for 100% renewable energy by 2045. This further adds to the allure of integrating a P2P energy market that can also help consumers financially benefit from the continued boom in solar power in the state. California will see installed solar rise from 18,260 megawatts to 34,500 megawatts according to the Solar Energy Industries Association. With California leading the U.S. in solar projects (580,737) according to Go Solar California, customers can break from tradition and leverage a P2P energy market, backed by encrypted blockchain, to be more in control of their energy, have the opportunity to monetize excess solar, live in cities that are more sustainable since energy can now be produced and consumed closer to the source. This will help fuel job growth in California communities and also add prosperity to local economies since savings from energy (California has some of the most expensive and least reliable energy in the U.S.) can be redistributed back into local commerce. 

Adding to California’s power grid problem has also been the battling of major droughts for five years already. Despite a steadily declining profile, 19 million gallons of California water supply are still used each day in power generation (freshwater is used to cool natural gas plants). Therefore in a state desperately looking to preserve water and lessen its reliance on neighboring states for electricity supply (especially dirty coal), Californians must quickly look to embrace new energy solutions such as solar power which require less water usage. This opens the door to more sustainable local energy production and a P2P energy market digitally built to support electricity produced from decentralized renewables, not from large scale natural gas plants whose production has surprisingly risen in California by a whopping 28% since 2005 according to Climate Central.

Beyond saving water, negating rising electricity prices, and further transitioning to a low-carbon economy as per the state’s goal to reduce CO2 emissions by 80% from 1990 levels by 2050, more reasons for California to secede from utilities and explore a P2P energy market is to create greater energy efficiency closer to the source, support more intelligent grid operational load balance opportunities to stabilize the state’s unreliable power grid, seek ways to monetize solar power expansion, and bring more transparency to renewables for people who really want them.

Whether or not California will really secede from the continental U.S. is still unclear. However, if preparing for a more sustainable, stable, more affordable and digitally modern decentralized energy era are truly the focus in “The Golden State”, unless the state actually ignored earthquake threats and revved up its reliance on older nuclear infrastructure, P2P energy markets can help the state shine bright in a whole new way. That my friends could further fuel the Calexit conversation, at least as it relates to the economic and environmental stranglehold put on California’s energy grid by utilities. That’s no, La La Land. That’s reality! 


John Licata is a Strategist and Communications Lead at Blue Phoenix Inc. focusing on the future of energy and digital innovation. You can follow John on Twitter @bluephoenixinc


Photo Courtesy: YesCalifornia