Decentralized Governance Opportunities for Energy Transitions: Evidence from Blockchain-based Initiatives

Abstract

This paper focuses on the role of blockchain technology as a socio-technical system environment capable of enabling decentralised governance mechanisms incentivizing the emergence of private (business) and commons-based solutions in the renewable energy sector. Our contention is that such socio-technical arrangements can contribute to fund, deploy and interconnecting the expansion of renewable energy infrastructure through blockchain-based platforms that provide new trust and coordination affordances to participants. Drawing on the examples of both the Sun Exchange company -- a paradigmatic example in South Africa -- and the DAISEE, a commons-based initiative in France -- this paper analyses dimensions of blockchain governance within the non-state law literature. Both examples show how private and commons-based initiatives supported by blockchain’s decentralised governance, cryptocurrencies and enabling business models are overcoming financial and institutional barriers to energy transitions in the Global South and the Global North. In this regard, blockchain technologies illustrate both the opportunities and challenges of emerging, decentralised governance systems where top-down forms of control (such as state control) are weak or missing. In this specific context, emergent properties from the repeated interactions of agents in the blockchain ecosystems can coalesce into patterns and codify into rules without the need for a hierarchy (lex cryptographia). From this standpoint, blockchain systems and their governance might be considered as a new type of customary law in the making. These processes also entail new socio-legal challenges in terms, for example, of conflict scenarios (breach of rules and codes), legal identities, or legal responsibilities.

Keywords: Blockchain, governance, renewable energy, finance, accountability, incentives, decision, global south, energy transitions

JEL Classification: A13, B25, B52, O16, Q56, Q4