Electricity is becoming the critical infrastructure of the twenty-first-century economy: artificial intelligence, data centres, electric vehicles, heat pumps and industrial electrification are increasing demand whilst solar, wind and batteries are making supply more distributed, weather-dependent and dynamic. The answer cannot be generation alone. Building more power stations, cables and substations remains essential, but it is expensive and slow. It also fails to address a central problem: electricity must be available in the right place at the right time. A country can have enough generating capacity overall whilst local networks remain unable to accommodate another housing development, charging hub, factory or solar installation. The deeper opportunity is to make the entire electricity system more intelligent: AI can shift demand towards moments of abundant supply, batteries can move electricity through time, virtual power plants can coordinate millions of small devices as one flexible portfolio and tokenisation can make ownership, flexibility and settlement more granular and programmable. Together, these technologies will transform homes, vehicles and buildings from passive energy consumers into active, flexible assets within an increasingly intelligent energy system. However, they also raise difficult questions, such as who controls the digital infrastructure, who owns the data, who captures the value and how do we ensure that a smarter electricity system is also secure, inclusive and fair?
Electricity becomes the operating system of the economy
For most of modern history, electricity has been treated as a background service - vital, but largely invisible and noticed mainly when the lights went out or the bill arrived. Yet that world is disappearing as the digital economy already depends on uninterrupted power, together with electricity becoming even more important as we scale AI and electrify transport, heating and industry. The objective is therefore to provide enough power quickly, cleanly, affordably and reliably. The International Energy Agency expects global electricity demand to grow by an average of 3.6% annually between 2026 and 2030, adding roughly 1,100 TWh each year. The US is forecast to require more than 420 TWh of additional electricity over five years, with data centres responsible for around half of that increase. On this side of the pond, EU demand is expected to rise by approximately 300 TWh, driven by data centres, EVs, heat pumps and recovering industrial activity; Britain faces the same structural challenge over a longer horizon. National Energy System Operator scenarios suggest annual electricity demand could increase from around 290 TWh today to as much as 785 TWh by 2050. Expanding generation and re-enforcing the grid are necessary, however, the current system was designed around peak demand, leaving much of its capacity underused. It is like building every motorway for the busiest holiday weekend. Continuing this approach as demand expands risks creating an unnecessarily expensive system. Higher electricity prices can weaken industrial competitiveness, increase public resistance and discourage households and businesses from replacing fossil-fuel technologies with electric alternatives. We need more infrastructure, but we must also use every cable, transformer and connection more efficiently.
Batteries change the physics and economics
Batteries are often discussed as if their primary function is to store surplus solar power, yet their role is much broader. Batteries are the shock absorbers of the electricity system: they charge when electricity is abundant or inexpensive and discharge when demand rises, prices increase or the grid becomes constrained. Together with power electronics, they can also provide frequency response, voltage control and other services that support stability. Moving electricity through time allows more renewable generation to be integrated, reduces peaks, relieves congestion and improves resilience. It can help networks accommodate data centres, EVs and heat pumps without immediately rebuilding every part of the system. Moreover, location matters - a battery beside a factory, school, supermarket, data centre or local substation can relieve stress where it occurs. It can absorb local solar generation, reduce a building’s peak demand, provide backup power and support the surrounding network. Notwithstanding, batteries will increasingly be embedded in homes, offices, factories, vehicles and appliances and many will meet their owners’ needs whilst also providing flexibility to the wider system. The principle is simple: generation creates electricity, storage moves electricity through time, intelligence moves demand towards the electricity.
From molecules to electrons and intelligence
Historically, the energy system was organised around molecules - coal, oil and gas were extracted, transported and burned. Competitive advantage depended on reserves, pipelines, refineries, ports, shipping lanes and geopolitical chokepoints. The emerging system is now organised around locally produced electrons: solar panels, wind turbines, batteries, EVs, heat pumps and power electronics generate, store, move or consume electricity. Meanwhile, a new layer is now being added above them - that of intelligence. Software, sensors, automation and AI will increasingly co-ordinate the system in real time; electricity enables AI, whilst AI helps optimise electricity. This feedback loop may become one of the defining dynamics of the twenty-first-century economy. This is also a productivity transition. Once energy becomes visible, controllable and flexible, connected machines can participate - a car becomes a battery on wheels, a building becomes a flexible asset and a data centre becomes a load that can respond to available power. Advantage will increasingly belong to countries and companies that can generate, store, move, coordinate and finance electricity at low cost.
AI is both the new load and part of the solution
AI makes the challenge more urgent because training and running models requires substantial data-centre capacity. But some computing tasks can be delayed, reduced or moved without affecting critical services. In March 2026, Google announced that it had contracted 1 GW of data-centre demand-response capacity enabling certain machine-learning workloads to be shifted or reduced when local grids are under pressure. However, the implication is counter-intuitive: tomorrow’s data centre may become not only one of the grid’s largest consumers, but also one of its largest controllable energy assets. If new demand is concentrated during existing peaks, it will require more generation and network capacity. If it responds to abundant electricity and underused infrastructure, it can spread fixed costs over greater consumption. This requires flexible demand, well-positioned storage and supportive regulation. The same logic applies to homes: AI can forecast weather, solar production, household demand, battery state, EV requirements and electricity prices. It can then co-ordinate devices continuously within preferences established by the user - an EV can delay charging from 6pm until overnight, a heat pump can pre-heat a building before an evening peak, and a battery can absorb rooftop solar during the afternoon and power the home after sunset. Individually, these decisions are small but co-ordinated across thousands or millions of locations, they can provide the equivalent flexibility of a power station. The US Department of Energy estimates that 80-160 GW of virtual power plant capacity by 2030 could address 10-20% of US peak demand and save around $10 billion annually in grid costs.
Community Virtual Power Plants (VPPs) put local priorities first
This transition is already relevant in the Netherlands. In many areas, rooftop solar, EV charging, heat pumps and batteries are developing faster than local substations and distribution networks can accommodate them. Power of the Many proposes a Community Virtual Power Plant, or Community VPP, as a local operating layer. A conventional VPP often starts by aggregating assets for wholesale energy and flexibility markets. A Community VPP starts with community objectives. Its priorities might be to increase local consumption of locally generated electricity, reduce simultaneous peaks, relieve congestion, improve resilience and retain more economic value in the neighbourhood; only the flexibility that remains after local priorities have been met is offered to wider markets. A VPP does not create electricity, it creates co-ordination: solar panels, neighbourhood and household batteries, EV chargers, heat pumps and flexible commercial loads can be managed as one portfolio. The system can decide when to consume, charge, discharge or export based on technical constraints, market conditions and community agreements. Moreover, this changes the role of households since they can become producers, storage providers, flexibility providers, co-investors and members of a shared energy portfolio. Unsurprisingly though, it can also create tension - an external aggregator may want to discharge a community battery when wholesale prices are high whilst the community may want to retain that capacity for an evening peak or emergency backup. Explicit priorities, transparent governance and clear rules about control are therefore essential.
Tokenisation can make value programmable
Tokenisation is often misunderstood as attaching a speculative crypto asset to every kilowatt-hour. That is neither necessary nor the strongest use case. Its practical value is the ability to represent different economic rights digitally, which might include a measured unit of renewable electricity, available battery capacity, a commitment to reduce demand, a share in a community battery or the revenues associated with that share. A Community VPP could measure who supplied energy, whose battery provided capacity and who reduced consumption during a constrained period. Programmable settlement could then distribute rewards quickly and transparently rather than hiding the outcome inside a complex annual bill. Tokenisation could also simplify shared ownership since a community battery may have many co-investors whose rights and revenues change over time - digital representation can support transparent records, distributions and transfers, subject to relevant regulation. However, the test is not whether a project uses blockchain - a conventional database may be simpler when participants trust one operator. Decentralised infrastructure is most useful when several parties need shared records, programmable ownership or automated settlement without unilateral control.
Can households trade electricity with each other?
Technology is moving faster than many market rules; households generally cannot bypass suppliers, balancing responsibilities, network charges and consumer protections simply to sell electricity to their neighbours. The EU began creating a legal foundation through its 2018 Renewable Energy Directive, which defines peer-to-peer trading of renewable energy, including automated execution and settlement directly or through an aggregator. Practical implementation still depends on national regulation. Britain’s 2026 Local Power Plan encourages community tariffs, peer-to-peer trading, local balancing and power-purchase agreements. In the US, FERC Order 2222 creates a route for aggregated distributed resources to participate in organised wholesale markets, although retail rules remain largely state regulated. These are different paths towards the same goal: enabling distributed assets to participate in a system designed for large generators and passive consumers.
Intelligence must be trustworthy, secure and fair
Digital technology can improve co-ordination, but it does not suspend reality: blockchain cannot prove that a faulty meter is accurate, tokenisation cannot compensate for poor grid design, AI can optimise the wrong objective with extraordinary efficiency. Cybersecurity also becomes inseparable from energy security since network of remotely controlled batteries, chargers and heat pumps is both a flexibility resource and a potential attack surface. Consumers and communities need to know who can control their devices, under what conditions and with what safeguards. Britain is responding through the Smart Secure Electricity Systems programme, with load-control licensing planned to become mandatory from March 2028. However, fairness may be the most difficult challenge - households able to buy solar panels, batteries and EVs may be rewarded for providing flexibility whilst renters and lower-income households remain excluded. A community model must answer not only how value is calculated but also who owns the infrastructure, who can participate and which benefits should be shared collectively. Municipal buildings and social housing can host shared assets whilst flexibility revenues can support energy-poverty programmes or lower costs for all members. Technology can automate an allocation, but it cannot decide what a fair allocation should be.
The grid is becoming a market
The twentieth-century electricity system consisted of a limited number of large generators supplying millions of passive consumers, and that architecture is becoming multidirectional: homes are becoming generators, batteries are becoming grid assets, EVs are becoming flexible loads, and mobile storage, buildings are becoming controllable portfolios with software becoming the dispatcher. Essentially, communities can become market participants rather than simply groups of customers. AI and tokenisation will not remove the need for power stations, transmission lines, distribution grids or regulation. Their value lies in allowing millions of small assets to co-ordinate as if they were one power station whilst making contribution, ownership and reward increasingly granular and programmable. The decisive infrastructure may therefore not be the largest generator: it may be the trusted digital layer that knows who can produce, consume, store, shift and settle electricity at any moment whilst respecting the physical constraints of the grid and the priorities of the people who depend on it.
The great energy story of the next decade is not simply that we will produce more clean electricity, it is that electricity will become the operating system of the economy. Once electrons are combined with intelligence, the grid ceases to be merely a delivery network; it becomes a marketplace. The question is whether we will design that marketplace deliberately, and also who it will ultimately serve?
This article first appeared in Digital Bytes (13th of October, 2026), a weekly newsletter by Jonny Fry of Team Blockchain.
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