As a business leader constantly bombarded by noise and technical jargon, it can be hard to get a clear sense of “what does the metaverse mean for me and my business?”. Whilst we don’t know the details of how Web3 and the metaverse will disrupt your industry, what we do know is that your industry will be disrupted, regardless of the industry you operate in. Identifying the opportunities in your industry should be on every leader’s priority list.
In this article we share why Australian businesses are uniquely placed to take advantage of the opportunities that will arise from Web3.
In its 2022 megatrends report, Australia’s government research agency CSIRO highlights 7 megatrends which will bring about a “tidal wave of disruption” over the next few decades.¹ Nestled amongst the grim forecasts of war, famine and disease are two megatrends which present an incredible opportunity for Australia: the next wave of virtualisation including Web3, and the rise of renewable energy.
Web3 technologies and renewable energy
Popular perceptions of the problems with Web3 technologies and renewable energy have taken hold over the past decade, without consideration of the advancements in these technologies. Megatrends and disruption however tell us one thing: the future will not look like the past. Applying a growth mindset to the two megatrends of virtualisation and renewables opens the opportunity for Australia to enable the full potential of Web3 through abundant renewable energy.
Today, Web3 technologies are at the forefront of innovation. Tomorrow, they will be commonplace. Ask ten different people what Web3 is and you’ll get ten different answers, ranging from “the next fad” to “a societal revolution”. Web3 encompasses a convergence of technologies and concepts, including blockchain, cryptocurrency, smart contracts, NFTs and the metaverse. Whilst we don’t yet know the details of how Web3 technologies will shape our world, what is clear is that it will increasingly matter for businesses and consumers, and will have significant energy requirements.
Power Demands of Web3
The prevailing narrative of Web3 technologies have been that they are wasteful and environmentally harmful. This perception has been driven by the inefficiency of cryptocurrency Bitcoin, itself only a small part of Web3. By one estimate, every transaction on the Bitcoin network generates nearly half a tonne of CO2, requiring planting 284 million trees to fully offset its 2021 emissions².
Lesser-known cryptocurrencies are far more energy efficient. The second most popular cryptocurrency, Ethereum, processes over 4 times the number of transactions of Bitcoin at 8.8% of the energy usage per transaction. Other cryptocurrencies using different technologies are even more efficient due to differences in how those cryptocurrencies work. Stellar processes over 15 times the number of transactions of Bitcoin, using only 0.000004% of the energy per transaction³.
We can look at how much energy is currently used to power today’s web infrastructure to get a sense of how much energy Web3 might require. Data centres and data transmission networks already use an estimated 2.1 – 2.4% of global electricity use⁴, with cryptocurrency mining using an additional 0.6%. Bitcoin alone is set to overtake the national electricity consumption of the Philippines⁵.
Power and computing requirements of ever more sophisticated and widely used Web3 technologies will only continue to rise. Chip manufacturer Intel believes that the metaverse alone will require “1000 times the computational efficiency”⁶ of current computers. Technological advancements such as 5G have kept pace with rising demand so far, meaning global data centre energy use has not increased much over the past decade, but there is no guarantee that they will continue to do so in future. At some point we can expect energy demands to grow due to a combination of energy intensive technologies and greater internet connectivity in the developing world.
Powering Web3 with Renewables
To achieve global net zero targets this energy must come from renewable sources. Australia currently generates 267 TWh of electricity per year, 28% from renewables⁷, approximately the same as the global power demand from data centres. Achieving 100% renewable power will be an incredible achievement, but only covers current power demand. Going beyond 100% renewables means having power in excess of domestic demand. It enables the export of power, or the development of energy-intensive industries such as Web3 infrastructure.
Australia is uniquely suited to become a renewable energy superpower. We have abundant solar potential⁸, land availability, access to minerals needed for solar and battery technology, a skilled workforce and proximity to energy-hungry Asia. We can be a major exporter of green power through green hydrogen or undersea cables. Plans are already underway to develop the world’s largest solar energy infrastructure network in the Northern Territory, with a cable connecting Darwin to Singapore to supply 15% of Singapore’s electricity needs by 2027⁹.
We need to invest further up the value chain to capture a greater share of the benefits from this renewables boom. As economist Ross Garnaut states in his 2019 book Superpower: Australia’s Low-Carbon Opportunity, “Australia has better renewable energy resources and therefore special advantages in energy using industries than any other country in a zero-carbon world economy”. Those industries include manufacture of green steel and aluminium. Capturing benefits in the knowledge economy means attracting investment in technologies with high-energy requirements where we have a competitive advantage, such as Web3.
Investing in the Metaverse
Access to cheap renewable energy already drives technology investment. Estimates range from 39-73% of Bitcoin’s energy consumption coming from renewable sources. Cheap hydropower in China’s Sichuan and Yunnan provinces, far in excess of local demand, already fuel up to 50% of global Bitcoin mining during the wet season¹⁰. Google, Facebook and Apple are committed to purchase renewable energy to match 100% of their operations.
Amazon is now the world’s largest corporate purchaser of renewable energy¹¹. Google has gone one step further by becoming the first major company to eliminate its entire carbon legacy, purchasing carbon offsets to cover the company’s entire historical carbon footprint¹². Demand for 100% renewable data centres is an opportunity for Australia, combing access to renewable energy sources with a highly skilled workforce and history of innovation.
Imagine a future where Australian renewables are powering the digital economy of the Indo-Pacific region. Where Web3 technologies are delivering on their promise of changing the world for the better without the nagging concern about whether it’s contributing to the climate crisis. The nation that invented Wi-Fi could become a hub for DeFi (Decentralised Finance), attracting investment and generating a high-tech jobs boom. That’s the kind of tidal wave we can all get behind.
Contact us to find out how your organisation can leverage Web3 and the metaverse to achieve its sustainability targets.
Data:
Australia generated 267twh of electricity in 2021, 28% renewable
https://www.energy.gov.au/publications/australian-energy-statistics-table-o-electricity-generation-fuel-type-2020-21-and-2021
“Australia has the highest wind and solar capacity of any developed nation and a wealth of critical energy minerals – we can be a leader in feeding the world’s hunger for clean energy,” he said.
Australia could become a leading producer and exporter of green hydrogen, but significant infrastructure investment and efficiency gains are needed to make it commercially viable, the report said.
Australia could also use artificial intelligence to solve some of the greatest challenges but must tackle trust issues that citizens have about its use.
https://www.crikey.com.au/2022/07/27/top-scientist-warns-of-seven-megatrends/
In this policy paper, WWF Australia sets out the priority policies required by Australian state and federal governments to position Australia as a renewable export powerhouse and put us on track to 700% renewables – that means having enough renewable energy for ourselves and having much more left over to sell to the world.
https://www.wwf.org.au/what-we-do/climate/renewables#gs.7iiwgy
We have a lot of sunshine
https://globalsolaratlas.info/
“AUSTRALIA HAS BETTER RENEWABLE ENERGY RESOURCES AND THEREFORE SPECIAL ADVANTAGES IN ENERGY USING INDUSTRIES THAN ANY OTHER COUNTRY IN A ZERO CARBON WORLD ECONOMY.”
ROSS GARNAUT
Australia mining worth $379bn in 2021/22
https://www.minerals.org.au/news/growth-australia%E2%80%99s-mining-exports-power-economic-recovery
Bitcoin used 130twh in 2021
https://www.bbc.com/news/science-environment-56215787
https://venturebeat.com/2022/01/26/the-environmental-impact-of-the-metaverse/
Kate Raworth: need for net positive, not net zero
Contact us to find out how your organisation can leverage Web 3 and the metaverse to achieve it’s sustainability targets.
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