Mon. Jan 24th, 2022

I was intrigued that Gillian Tett started her column (Opinion, 7 January) by asking how crypto can ever be green while Chris Giles, in the same newspaper, equally pessimistically concluded that no “silver bullet” can solve the 2022 British energy crisis (“Rotten British energy market is expensive and difficult to correct ”, Opinion7 January).

Maybe we can both look at problems through a different lens. Take Denmark. It has shown over the decades since the 1973 oil shock that the route to resilience and energy security is to reduce carbon fuel consumption for any given consumption of useful energy, a process known as “exergy”. It covers heat and cooling, power and mobility, light and so on.

On the other hand, since 2008 cryptocurrencies and currencies, without a use value but with a subjective value in exchange, have been manufactured and sold with a significant consumption of useful energy.

It seems to me that the British and European commodity markets in natural gas and electricity must now make way for a new generation of smart markets in energy services. Imagine new physical “exchange” markets in flow of gas supplied (not sold) over time, in exchange for flow of power or mobility. There is nothing new about this concept: during and after the first Nagorno-Karabakh conflict, Iran exchanged gas for Nakhchivan in exchange for surplus power from Armenia.

Then imagine how the resulting valuable flow of energy use can be monetized, simply by issuing and selling “energy credit obligation” instruments that can be repaid as payment for energy use. Again, there is nothing new about such vouchers. Prepaid credits are regularly distributed to those in fuel poverty.

In short, it is entirely possible to introduce a new generation of simple, effective, complementary “energy fintech” market agreements and instruments that share cost, risk and production, thereby competing on the quality of energy services while at the expense of be collaborated.

Chris Cook
Senior Research Fellow, Institute for Strategy, Resilience and Security, University College London, London WC1, UK

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