With Fukishima’s nuclear reactors set to restart for the first time since 2011’s meltdown, you could be forgiven if you missed another bit of recent energy-related news from the east-central prefecture: an exciting blockchain-powered pilot has just been given the green light. If successful, it could change the way Fukishima – and perhaps indeed the whole country – consumes, generates and trades electricity.
Bitcoin-related developments are now on the rise in the Land of the Rising Sun, for the first time in a long time. And even if 2017 has seen a few bumps in the road for pioneers (with virtual exchanges under “full” surveillance beginning this month and a cryptocurrency crackdown in nearby China), Japan’s policy makers, industry leaders and tech gurus seem to be close to a consensus on cryptocurrency. They seem to agree that while China hesitates, Japan can take advantage – and surge ahead in the bitcoin stakes.
Yet many in the country argue that blockchain-related developments still have some way to go in order to catch up with this bitcoin progress. And this is where Japan’s energy sector could be poised to provide some much-needed impetus.
The fallout from Mt Gox continues to rumble on in Japan three years on, and blockchain has, some say, also suffered as a result. The technology’s association with bitcoin continues to scare off some of Japan’s more skeptical thinkers.
Indeed, at the recent Tech in Asia conference in Tokyo, digital currency exchange operator BitFlyer’s CEO Yuzo Kano spoke in no uncertain terms about the subject. Kano said that when Japanese citizens move house, for example, registering changes of addresses with local government authorities can be a painstakingly analog process. Indeed, for such a digitally advanced nation, many basic procedures are mired in red tape.
Yuzo Kano stated, “A central system would mean procedures [like the above] could be done almost at once. Japan is quite behind in this field I think – but blockchain can make it easier.”
Incidentally, Yuzo Kano and his colleagues have had quite an exciting few months leading up to Tech in Asia. Back in August, BitFlyer announced it would open a trading exchange in the United States. And late last month, the platform was named as one of the Japanese Financial Services Agency’s first 11 license-holding exchanges.
Other Japanese tech hard-hitters concur with the BitFlyer CEO. The principal analyst at Mitsubishi UFJ Financial Group, Tatsuto Fujii, noted that the Japanese preference for paper-based financial exchanges provides a unique challenge for fintech pioneers – but not one that cannot be overcome. “How do you get something like paper bank checks on the blockchain?” he asked. “It can be done, and without damaging the culture of paying by check. We can preserve it by digitalizing it.”
And if blockchain technology does kick into gear in Japan, perhaps it will be the country’s energy sector – rather than its financial industry – that ends up leading the way.
Energizing the blockchain
Fukishima’s blockchain power pilot is wide-ranging, with the potential to facilitate renewable energy drives and test-run a so-called “smart” energy grid. The initiative will see 1,000 households in the area move onto a platform whereby energy data is managed using blockchain technology.
Its advocates say the trial could bring about a “sharing” culture in energy, whereby houses with their own solar and other renewable power generation systems could supply surplus power to other households on the grid.
All inter-household transactions would be logged and stored on the chain, allowing all parties unrestricted access to the immutable data blocks.
The scheme will begin on January 1, 2018. It is the brainchild of Azai Laboratory, a local tech startup, which is working in conjunction with Tokyo-based power provider Eneres. The latter has spoken of creating “a new electric power service” for Japan, should the trial prove successful.
Indeed, things are moving fast in Japan’s energy sector. Earlier this year, Japanese utility giant Tokyo Electric Power Company (TEPCO) invested some US$3,500,000 in German firm Conjoule’s blockchain-powered, P2P energy trading platform. TEPCO claims, “Blockchain technology will redefine what is possible within the energy ecosystem.”
Furthermore, following on from the news that its subsidiary Bitpoint had been granted legal recognition as a digital currency exchange platform, parent company Remixpoint has recently announced a nationwide bitcoin-powered energy payment system. The system actively promotes bitcoin usage – providing discounts for customers who pay in digital currencies.
Meanwhile, elsewhere in the Asia-Pacific region, others are also pushing ahead with potentially game-changing blockchain-related power developments. Australia’s Power Ledger scheme is not dissimilar to the Fukishima pilot or the now-famous Brooklyn microgrid.
The Australian scheme is another P2P energy trading platform that allows buyers and sellers to trade renewable energy without a middleman. Once more, it has been built using blockchain technology, and optimists in the country are hoping it will provide a boost for a whole host of renewable power incentives.
Many in Japan remain quietly guarded about blockchain developments, and bureaucracy provides a considerable barrier to progress in several sectors. Although central government policymakers and industry heads are still evangelizing for blockchain progress, the speed of implementation – say some – remains painfully slow.
But with the energy sector now looking very seriously at ways to utilize – and optimize– not only blockchain technology, but also digital currencies, things are starting to look up. If bureaucrats and the general public can be swayed by the power industry’s progress, Japan’s speed of blockchain progress could become electrifying.