Technology

Blockchain Technology Faces data Protection Restrictions in Green Energy Sector

The demand for Green Energy is heightening globally. Likewise, blockchain technology has continued to enjoy widespread implementation in several sectors including the green energy industry.

The daily depletion of the environment and several natural resources have raised concerns over the viability of traditional energy sources in the long run, hence, the urgent need for alternative energy sources.

But what is the link between the Blockchain and the Green Energy Sector?

Blockchain and the Green Energy Equation

Globally, several industries have already integrated the blockchain tech into their folds to create an efficient and transparent business model; while many more businesses are just beginning to key into the benefits of the distributed ledger technology.

One of such sectors where the decentralized technology is making waves is the Green Energy Sector. Start-ups in the energy sector like Powerledger, EnergiToken, XiWATT and WePower have made it possible for consumers to access cheap energy sales by establishing a direct link between them and Green energy producers who trade energy via tokenized auctions.

Blockchain and Green Energy – Use Cases

In the U.S, especially California, several companies have harnessed the blockchain to provide solutions in the Green Energy industry. CEBN and PowerLedger are both collaborating with Silicon Valley Power on a pilot project to track the production and utilization of solar energy in the parking garage of Santa Clara and to tokenize energy utilization at the Electronic Vehicle charging stations at the garage.

Operators of Electric Vehicle charging network are afforded the opportunity to trade credits from charging stations with traditional fuel producers by the California Air Resources Board.

Before the advent of the blockchain, administration, tracking and sales of credits posed serious problems for most charging network providers. However, this pilot project will harness blockchain technology benefits to help track and retrieve all necessary data at minimal administrative costs and less accounting.

The collection and tracking of data will ensure that EV charging operators receive Low Carbon Fuel Standard (LCFS) credits and are able to trade them form potential economic gain.

The Challenge

Blockchain adoption in the green energy industry promises to improve the overall structure of the sector. A complete facelift in the energy sector inspired by the blockchain technology will no doubt require the collection of massive user data.

The major challenge for companies in the blockchain-energy sector is the consumer data protection and restriction laws otherwise referred to as data privacy regulations.

Blockchain and Green Energy Sector – Consumer Data Privacy Regulations

Data privacy is considered a major challenge for blockchain-based companies like PowerLedger and WePower. One of the fundamental propositions of the blockchain is to collect data and permanently record them on a secured distributed ledger. This idea is however incompatible with the new data regulations of the European Union and the U.S (especially in California). These regulations are termed “right to deletion” and “right to be forgotten.”

Right to Be Forgotten

In the EU, (GDPR)General Data Protection Regulations became effectual on the 25th of May 2018. According to the GDPR, a user can request immediate deletion of data and the concerned custodian must act immediately.

Right to Deletion

This particular consumer data privacy act is applicable in California – the 5th largest economy on the globe. The (CCPA)California Consumer Privacy Act will become effectual from the 1st of January 2020. According to the CCPA, any customer can request a service provider to put personal information out of the reach of search engines.

Implications of these Restrictions

Although the GDPR is a much stricter regulation compared to the CCPA, both acts pose a similar problem to blockchain-based energy companies.

How can a company even utilize the immutability of the blockchain ledgers when there is no data to hold in the first place?

Blockchain’s most attractive feature which is the “immutability of records,” clashes with the legal requirements of the GDPR and CCPA and could result in worrisome implications for blockchain-based companies in the Green Energy sector operating in the EU, California and around the world.

The CCPA Criteria

In accordance to CCPA’s regulations, any profit-oriented company from anywhere that collects personal data from the residents of California must satisfy one of these criteria:

  1. Gross revenue must be above USD25 million
  2. Trades the personal data of over 50,000 consumers, devices or households
  3. 50% or above of revenue is obtained from the sales of consumer’s data

Implications of the CCPA

Taking the aforementioned pilot project as a case study. This project collects data generated from all the transactions conducted at its EV charging stations and to facilitate LCFS credit sales, the obtained data must be held on the secure blockchain ledger.

If PowerLedger, WePower and the Silicon Valley project were to be subjected to the criteria stated by CCPA, they will be accused of collecting and permanently holding the private data of the residents of California.

Come 2020, the data subjects will have the legal backing to request the deletion of their personal information.

Getting Ahead

WePower, in particular, is experiencing data restriction issues in the European Union. As things stand, erasing personal data of subjects would be impossible for WePower.

However, Blockchain-Green Energy enthusiasts have argued that the tensions existing between the Blockchain and GDPR can be alleviated by data anonymization.

This is because GDPR acts do not hold for anonymized information that cannot be identified or reconstituted by any means. A setback, however, is that the current data anonymization technology is not GDPR-compliant.

Until perfect anonymity exists, blockchain might continue to face data protection and restriction problems. But without doubts, data anonymization on the blockchain is key to ensuring that the Blockchain becomes GDPR-compliant.

Conclusion

The data privacy acts were first passed in the EU and California and it is expected that other jurisdictions will follow suit, and in the future, they will be able to examine how data privacy regulations affect the blockchain technology and its adoption in the green energy sector.

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Ultimately, the regulators of the data privacy act must ensure that emerging tech like the blockchain is taken into consideration. Without an adequate comprehension of the innovations of the blockchain, regulators might be undecided between deliberately violating citizen’s data protection or enabling innovations that will give rise to the utilization of Green Energy.

Author Bio:

Denise Quirk is a Health Advisor who is fascinated by Crypto and Blockchain Revolution. She is a believer of transforming complex information into simple, actionable content. She is keenly interested in finding the value of the crypto world. She consistently writes for Coin Review. You can find her on Linkedin, Twitter and Facebook.