Last Updated on January 29, 2024 by News Editor
When we mention decentralization, your mind might shift to decentralized finance, like digital currencies. However, decentralization also extends into energy sources. For a region like the Middle East, blessed with natural resources like oil and gas, energy sources are not scarce.
Furthermore, the Middle East is gradually transitioning to a clean energy economy. For in
stance, under its Vision 2030 economic plan, the Kingdom of Saudi Arabia aims to reduce its dependence on oil and increase a sustainable electricity plan. Again, the region is blessed with renewable energy sources that make generating energy efficient. Solar and Wind are some of its primary clean energy sources.
In essence, the model used to generate electricity from non-renewable sources might not be so sustainable because of the increased recognition of generating energy with renewable sources. Thus, a focus on decentralization for the Middle East’s energy model can be prioritized now.
Why a decentralized system is best for the Middle East’s energy model
Decentralization is centred on blockchain technology. The advantages of utilizing a decentralized system for the energy model of the Middle East include the ease of access and greater and fairer participation in energy sources, especially clean energy. To depict in an accurate way why the Middle East should decentralize its energy model, we can look at addressing it in the following reasons.
First, the world we live in today is highly infused with innovative and disruptive technologies. The widespread development of renewable energy and the emergence of smart grids are two major driving forces of decentralized energy models. There are now renewable energy plants all over the Middle East. We have the Sudair Solar Power Plant in Saudi Arabia, Hatta Wind Power Project in Dubai, and Al Dhafra Solar project in Abu Dhabi, to mention a few. New technology is developing fast in the region, and decentralized systems are the best way to manage these innovative technologies.
Second, flowing from the first point, a decentralized energy model allows the Middle East have greater reach. When there are no centralized energy models causing bureaucracy in energy distribution, local communities can access energy more. Research has revealed that regions and communities can benefit better from decentralized energy models because companies like Community Choice Aggregators (CCA’s) will act in the best interest of customers who desire clean, “carbon-free” energy.
Lastly, going further on the previous point, decentralized energy models will help maximize consumer satisfaction. Many people in the Middle East are gradually shifting towards more renewable energy sources. Thus, implementing a decentralized scheme allows more people to access the type of energy they desire.
No doubt, centralized systems have benefitted the Middle East. They make energy distribution more efficient and possible than a century ago. However, they have served their purpose and now face worthy competition from decentralized energy models.
What is essential now is that the Middle East, a region still learning to adopt decentralized processes, adjust to the fast-developing decentralized models. This could look like initiating energy-specific policies that implement and legalizes decentralization into the region’s energy model.