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How can we resolve the geopolitical conflict over energy?

Image: Envato / Press Master

How do we resolve the geopolitical conflict over energy?

The global race for energy is increasingly dominating the geopolitical agenda, while renewable technologies and critical minerals are replacing fossil fuels as the central source of conflict. Blockchain-based decentralized energy systems have the potential to reduce dependencies and increase resilience to geopolitical tensions.

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Energy as a central source of conflict

Energy is the engine that drives our modern world. It powers industries, sustains economic growth and plays a central role in international security.

Control of energy sources has always fueled conflict. Historical examples include the oil crises of the 1970s, which plunged the West into economic turmoil, and the ongoing conflicts in the Middle East, often referred to as ‘resource wars’. But while oil and gas have dominated recent decades, interests are increasingly shifting to new energy resources.

One aspect that is often overlooked is the battle for critical minerals. Rare earths such as neodymium and lithium are essential for renewable energy technologies such as wind turbines and batteries. Control over these resources is heavily concentrated in a few countries. China, for example, controls around 60 percent of global lithium production and more than 80 percent of rare earth processing. This dependence harbors an enormous geopolitical risk, which can be reflected in trade conflicts and tensions.

Power, control and influence through energy

The importance of energy as a geopolitical weapon is evident in the current tensions between Russia and Europe. After Russia’s attack on Ukraine in 2022, the West increased its use of sanctions, while Russia sought to use its position as one of the largest energy suppliers to put pressure on Europe.

Dependence on Russian gas left many European countries vulnerable, and the sudden need for alternatives led to a race for new supply contracts with countries such as Qatar and the US.

Moreover, it is interesting to note that the Ukraine conflict has also intensified the debate on energy independence and diversification. European policy is now increasingly focused on renewable energy and the expansion of LNG terminals to reduce dependence on fossil fuels from geopolitically unstable regions.

Another example of energy triggering conflict is the competition over the South China Sea. This region is home to large untapped reserves of oil and gas, and access to these resources is one of the main reasons for China’s aggressive territorial claims and the increasing US military presence in the region.

Blockchain technology has potential for geopolitical risk mitigation

While traditional energy systems are centralized and prone to geopolitical tensions, decentralized solutions could offer a more equitable future. In particular, blockchain-based energy markets and distributed renewable energy generation could provide new ways to stabilize global energy supplies.

Blockchain technology has the potential to decentralize energy trading by enabling direct transactions between producers and consumers. In peer-to-peer energy markets, households can sell excess solar power directly to their neighbors without a central intermediary.

Microgrids increase energy flexibility

In addition, the development of microgrids – local energy networks that function independently of national power grids – could increase resilience to geopolitical disruptions. These microgrids are often based on solar, wind or battery technologies and can be particularly beneficial in crisis areas or regions with unstable political conditions.

One example of this is the reconstruction of the power supply in Puerto Rico after Hurricane Maria. Here, solar energy and microgrids were used to create a stable and more resilient power supply that is less susceptible to natural disasters or political crises. This shows that decentralized energy supply can make sense not only ecologically, but also geopolitically.

ION Power Grid embraces decentralized energy distribution

The ION Power Grid pursues a similar goal, relying on a decentralized network of microgrids that function independently of central power grids and are therefore more resilient to disruptions. By integrating blockchain technology, the system enables peer-to-peer energy trading, which makes efficient use of surplus renewable energy and reduces dependence on centralized, geopolitically vulnerable energy sources.

The combination of real-time transactions, smart contracts and increased transparency improves adaptability to changes in demand and strengthens confidence in the energy system. This structure also encourages investment in renewable energy, creating a more resilient and sustainable energy future.

This could not only increase energy efficiency, but also reduce dependence on large, state-controlled energy companies, which are often used as political leverage.

Challenges and Potential for a Distributed Energy Transformation

Despite the promise, there are challenges. Distributed energy networks require significant investments in infrastructure and technology, and building a global distributed energy system could take decades. In addition, many countries that rely heavily on fossil fuels-such as Russia, Saudi Arabia, and Iran-are reluctant to give up their monopoly positions.

Another obstacle is regulatory. The legal framework for peer-to-peer energy trading and microgrids is still underdeveloped in many countries. There is also a risk that decentralized energy systems themselves could become the target of cyber-attacks.

Why we need a new energy order

The current geopolitical situation clearly shows that our dependence on centralized energy systems and fossil fuels makes us vulnerable. A decentralized energy future supported by renewable technologies and blockchain technology could not only increase the resilience of the global energy supply, but also contribute to a fairer and more stable world.

In a world where control over energy is becoming an instrument of power, promoting decentralized solutions could be the key to a more stable and peaceful global order.

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