Market electricity prices grow every year in most countries: For instance, in 2018, prices in Europe increased by 20–40%. Constant increases, together with a lack of transparency, are a serious cause for concern for households and small businesses. Luckily, innovations in distributed ledger technology can provide a solution.
The price of energy depends on many factors: fossil fuel prices, the geopolitical situation, the season (for example, demand is lower in the summer, when there is no need for heating), specific production costs (less hydroelectric energy is produced in the summer), etc. Consumers are not always exposed to the full scale of price fluctuations since many governments provide subsidies. At the same time, they fall victim to price increases not directly tied to the market situation. For example, any new government initiative that creates additional costs for power plants will result in a price increase, as well as investments into capital, the construction of new installations, and so on.
Information Asymmetry: the Real Enemy
Electricity prices for consumers may fluctuate, but the key issue is that they should remain completely non-transparent. It is usually quite difficult to understand where the amount on your utility bill comes from due to the complicated pricing schemes used, and even if consumers manage to figure out how much energy they’re using, there’s still no way to know how much it actually costs to produce electricity: which part of the bill is the real cost, and which part was transferred onto consumers by the energy company to cover a new environmental tax?
This is a classic case of information asymmetry: The electricity company knows exactly how much it spends on producing and distributing energy, while the customer is kept in the dark. The consequences are dire: Users consume much more electricity than they really need and remain uninformed about other options present on the market. Financial losses are even more serious for businesses, which usually consume significantly more energy than households.
One solution to the asymmetry problem is smart grids, which are new-generation grids equipped with sensors at every stage, from the power plant to homes and offices. The smart meters show precisely how much energy has been and is being consumed in real-time. Users can see how much they save by turning off appliances kept on standby, switching to LED, or running energy-intensive tasks at night.
LCG Energy is a well-known energy reseller, electricity supplier and energy contractor. The smart meters which the company has been installing over the course of the last years have already helped thousands of businesses and individuals reduce their electricity costs by 20% or more, simply by analyzing and optimizing usage. However, LCG is planning to do much more.
A Vision of the (Near) Future
The new LCG Energy initiative aims to unite users, energy sellers, and sustainable new projects into a single ecosystem powered by the LCG Energy token.
All users who already buy electricity from LCG will be able to pay for it using tokens. For those who are not clients of LCG, there will be numerous other ways to benefit from holding tokens – most significantly, by supporting promising energy startups. LCG will select projects in the segment of renewable energy that can offer an ROI of 20% and up. Apart from receiving funding from LCG itself, these projects will be able to raise funding among the platform’s users.
Thanks to blockchain technology, it will also become possible to track the cost of production of each unit of energy. For the first time, consumers will know the true price of electricity and will thus be able to make better choices. Many will surely choose to switch to green energy once they see that power plants tend to load their costs onto users.
Electricity bills do not have to be a source of constant anxiety. In the next few years, we will see the development of completely new ways of buying energy that is more transparent and affordable. Companies like LCG – with a large customer base, industrial know-how, and expertise in the field – will be at the forefront of this transformation.
Learn more about the LCG Company and their upcoming blockchain project on https://lcg-group.de/
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