Why local energy decision making is essential
Instead of top-down control, we need a system that empowers local communities to manage their own energy, says UrbanChain's Kristian Lande
The problem with a centralised energy system
Our energy system was built for a different era – when power came from a handful of large fossil fuel plants, and electricity flowed in one direction, from these central hubs to homes and businesses. Back then, this made sense. Today, it doesn’t.
Renewable energy sources like wind and solar don’t work the same way. They’re distributed – generated across thousands of locations, not just a few big plants. But we’re still trying to run the system as if nothing has changed. The result? Higher costs, inefficiencies, and missed opportunities.
The cost of an outdated model
Centralised decision-making has led to a situation where power is generated far from where it’s needed, forcing us to build ever more infrastructure to transport it. This drives up costs and leads to significant energy losses along the way.
It also creates bizarre market distortions. For example, on some days electricity prices swing wildly. Yesterday you could have bought power for £100 and sold it for £3,000 just hours later. This isn’t a functioning market; it’s a sign of a system failing to match supply with demand efficiently.
Meanwhile, we’re paying around £1 billion a year to turn off wind turbines because the grid can’t handle their output. That’s right – clean, cheap energy is being wasted because our infrastructure and market rules aren’t designed to use it properly.
The grid is struggling to keep up
The grid isn’t built for how energy flows today. The old system was predictable – coal and gas plants produced steady power, and we used it as needed. But today, with solar panels on roofs and wind farms across the country, energy flows in multiple directions.
We face transmission bottlenecks, congestion, and local overloads. Prices are set nationally, rather than responding to what’s happening locally. This means that while some areas have an excess of renewable power, others experience shortages – and no one has the flexibility to respond effectively.
The limitations of corporate PPAs
One way to fund new renewable energy projects without government support is through Power Purchase Agreements (PPAs), where companies agree to buy electricity from a specific source for 10-15 years. In theory, this sounds great. In practice, it’s limited to around 350 companies worldwide, mostly tech giants and heavy industry. That’s because of the stringent financial demands: companies need to hold up to 70% of the contract value in cash.
It's unfeasible for most companies, which slows down the transition to a cleaner energy system. Meanwhile, energy suppliers struggle too. If over-insuring each megawatt four times over still demands bailouts (as we saw two years ago), is there a better alternative?
The case for local energy decision making
Instead of top-down control, we need a system that empowers local communities to manage their own energy. It’ll protect us from both climate change and risks to national energy security. This isn’t a radical idea – it’s common sense.
Giving people control over their energy use, with real-time pricing and local trading, would lead to smarter consumption. Imagine delaying your washing machine or EV charging until prices drop, or selling excess solar power to a local business instead of exporting it miles away for a fraction of its value.
Local decision making is a stark contrast to big, centralised projects. Historically, these centralised ‘silver bullet’ energy solutions often fail. In the 1980s, three US states nearly went bankrupt over nuclear plants that were never built. The UK faced similar crises in the 1950s with overly complex magnox nuclear reactors. Yet we keep repeating the same mistakes.
A smarter future with UrbanChain
At UrbanChain, we’ve built a platform that enables local energy trading, making it easy for communities to buy and sell renewable power directly. By using blockchain technology, we ensure transparency, traceability, and cost savings. Our model means people can access cheaper energy while reducing waste and supporting their local economy.
Our founders, Mo Hajhashem and Somayeh Taheri, started this journey from an academic background, not the energy industry. That fresh perspective helped them rethink the system from the ground up – how energy should work for people, not just large corporations.
The transition to a decentralised energy system isn’t just possible – it’s necessary. By embracing local decision-making, we can cut costs, reduce waste, and build a more resilient and sustainable energy future.
The power to change the system is in our hands. Let’s use it.
Kristian Lande, Director – PPA & Storage Origination, UrbanChain
