Beyond Blackouts: Investing in Decentralized Grid Resilience
How DePIN Offers a Bottom-Up Fix for Top-Down Grid Failures. By Matthew Mousa, Director Strategy & Research
The scenes across Spain and Portugal this week felt uncomfortably familiar, yet jarringly contemporary. Millions plunged into darkness, transport grinding to a halt, commerce paralyzed. While officials investigate the precise trigger – a "rare atmospheric phenomenon" leading to "anomalous oscillations" on high-voltage lines, according to Portugal's grid operator REN – the underlying fragility it exposed is undeniable. Spain saw its power generation plummet by roughly 15 gigawatts, about 60% of typical demand, in just five seconds. This wasn't a localized flicker; it was a systemic shudder across the Iberian Peninsula, briefly rippling into France and Morocco.
Europe’s energy grid, a vast network connecting 266 million homes and businesses across over 11 million kilometers of lines, is groaning under the strain of a necessary, yet complex, transition. Ambitious goals, like Spain targeting 81% renewable electricity by 2030, demand massive infrastructure upgrades. Yet, integrating intermittent sources like wind and solar onto grids designed for centralized, predictable fossil fuel generation is proving difficult. Add aging infrastructure – roughly 40% of Europe's distribution grids are over 40 years old – and increasingly extreme weather events linked to climate change, and you have a recipe for instability. The estimated €2 trillion needed by 2050 for grid upgrades highlights the scale of the challenge. The delays are already apparent; over 800 GW of potential wind and solar capacity is bottlenecked awaiting connection, and project approval delays are slowing transformer deployment needed for this integration.
It’s tempting, perhaps, to view this from across the Atlantic with a sense of detachment. Europe’s energy mix, its regulatory patchwork, its proximity to geopolitical tremors – these are distinct challenges. Yet, complacency would be a grave error. The United States faces its own daunting power grid vulnerabilities. The American Society of Civil Engineers recently downgraded the US energy infrastructure's grade to a D+, citing an aging, fragile grid struggling under soaring demand. This demand isn't just population growth; it's the surge from data centers powering AI and the accelerating electrification of transport and industry. ASCE projects, AI, and EVs alone will demand an additional 35 GW by 2030, requiring utilities to potentially double existing transmission capacity to connect new renewable sources.
Our grid, much like Europe’s, was largely built for the climate and demands of the mid-20th century. It is ill-prepared for the intensifying heatwaves, wildfires, and storms climate change brings, which increase transmission failure risks. Furthermore, the specter of cyberattacks looms large. The Office of the Director of National Intelligence’s 2025 Threat Assessment explicitly warns of nation-states like China and Russia possessing the capability to compromise US critical infrastructure, including the power grid. The White House itself acknowledged an "unprecedented surge in electricity demand" coupled with "existing capacity challenges" places a "significant strain on our Nation's electric grid," constituting a risk to national and economic security. The investment gap is stark: even assuming funding from recent infrastructure acts continues, the energy sector faces a shortfall estimated between $578 billion and $702 billion by 2033.
The traditional approach – massive, centralized capital expenditure by incumbent utilities – feels increasingly inadequate to meet the speed and complexity of these converging challenges. This is where a different paradigm, rooted in decentralization and shared contribution, warrants serious consideration: Decentralized Physical Infrastructure Networks, or DePIN.
DePIN leverages blockchain technology and token incentives to crowdsource the deployment and operation of real-world infrastructure. Instead of monopolies owning and controlling networks – be it energy, wireless, or data storage – DePIN models enable communities of individuals and businesses to contribute resources and be rewarded for it. This isn't merely about abstract digital tokens; it's about building tangible infrastructure – wireless hotspots, data sensors, distributed energy resources – in a more distributed, resilient, and potentially cost-effective way. By breaking down monolithic structures, DePIN aims to foster competition, transparency, and user ownership in sectors often dominated by natural monopolies.
In the energy sector, the DePIN concept holds particular promise. The vision extends to networks of smart meters, batteries, solar panels, and EVs acting as active grid participants, coordinated via decentralized protocols. Several projects are tackling different facets of this decentralized energy future.
GEODNET ($GEOD) focuses on a critical enabling layer: high-precision location data. Its decentralized network of over 16,300 GNSS base stations provides centimeter-level accuracy, essential for managing distributed energy resources (DERs), optimizing grid flows, and enabling smart device coordination. While not directly managing energy, GEODNET provides the foundational spatial intelligence modern grids require. Its recent $8 million fundraising round and inclusion in Grayscale's assets under consideration list highlight its growing relevance.
Arkreen Network ($AKRE) takes a more direct approach to renewable energy. It's building a Web3 infrastructure specifically for connecting distributed renewable energy assets like residential solar photovoltaic (PV) and storage. Using IoT devices (miners), Arkreen collects and verifies green energy generation data on-chain. This verified data can then be used to create tokenized Renewable Energy Certificates (RECs) or contribute to Virtual Power Plant (VPP) applications, effectively monetizing green energy contributions from smaller, distributed sources. Arkreen reports having already connected data from over 200,000 distributed sources and issued significant tokenized RECs, partnering with other DePIN projects like C4E to advance sustainable solutions.
Other projects like React Network aim to create decentralized energy grids by connecting thousands of user-deployed batteries, smart meters, and solar panels. React intends to reward participants for contributing energy data and allowing their devices (batteries, thermostats, EV chargers) to share excess energy or adjust consumption to help balance the grid, offering a cleaner alternative to firing up fossil fuel peaker plants. It utilizes infrastructure like W3bstream for off-chain compute to manage device data and verify energy contributions before distributing rewards.
The concept of decentralized Virtual Power Plants (VPPs) is central to many DePIN energy efforts. Projects like Daylight Energy, which recently raised a Series A led by a16z Crypto, aim to build platforms where users can sell energy data or grid services from their connected devices (thermostats, EVs, batteries) directly to energy companies or aggregators, coordinated via crypto-economic incentives.
These examples illustrate the multifaceted approach DePIN brings to the energy challenge. GEODNET provides foundational data; Arkreen focuses on verifying and monetizing renewable generation; React and Daylight envision actively coordinating distributed assets for grid services. They represent different layers of a potential future energy stack, built from the bottom up.
The implications for investors are becoming clearer. DePIN represents a nascent but potentially disruptive force in physical infrastructure, tackling multi-trillion-dollar markets burdened by aging assets and centralized bottlenecks. The recent events in Europe and the documented vulnerabilities in the US underscore the urgent need for innovation in grid resilience and flexibility. Catalysts to watch include partnerships with utilities, integration into smart city initiatives, advancements in battery technology, and regulatory clarity around decentralized energy participation and peer-to-peer trading, a market projected to grow significantly. Risks certainly remain: the inherent volatility of token incentives, the challenge of scaling physical hardware networks, navigating complex energy regulations, and proving technological reliability against established players. Yet, as traditional infrastructure strains under 21st-century demands, the decentralized alternative looks increasingly worthy of attention.
Resources:
Al Jazeera (29 Apr 2025). What we know about power outage in Spain, Portugal. https://www.aljazeera.com/news/2025/4/29/what-we-know-about-power-outage-in-spain-portugal
CBS News (29 Apr 2025). Power outage in Spain and Portugal still a mystery... https://www.cbsnews.com/news/spain-power-outage-portugal-2025-cause-mystery/
European Court of Auditors (01 Apr 2025). Review 01/2025: Making the EU electricity grid fit for net-zero emissions. https://www.eca.europa.eu/ECAPublications/RV-2025-01/RV-2025-01_EN.pdf
Clean Energy Wire (06 Mar 2025). Grid expansion and flexibility could reduce European electricity prices – report. https://www.cleanenergywire.org/news/grid-expansion-and-flexibility-could-reduce-european-electricity-prices-report
Smart Energy International (23 Apr 2025). Navigating Europe's renewable energy challenges... https://www.smart-energy.com/industry-sectors/energy-grid-management/navigating-europes-renewable-energy-challenges-and-the-impact-on-distribution-transformers/
Utility Dive (27 Mar 2025). US energy infrastructure gets a D+ from American Society of Civil Engineers. https://www.utilitydive.com/news/energy-infrastructure-transmission-transformers-civil-engineers/743698/
EHN.org (30 Sep 2024). Aging infrastructure and climate change leave power grid vulnerable. https://www.ehn.org/aging-infrastructure-and-climate-change-leave-power-grid-vulnerable
Industrial Cyber (26 Mar 2025). ODNI 2025 Threat Assessment notes threats from Russia, China, Iran, North Korea... https://industrialcyber.co/reports/odni-2025-threat-assessment-notes-threats-from-russia-china-iran-north-korea-targeting-critical-infrastructure-telecom/
White House (08 Apr 2025). Strengthening the Reliability and Security of the United States Electric Grid. https://www.whitehouse.gov/presidential-actions/2025/04/strengthening-the-reliability-and-security-of-the-united-states-electric-grid/
Phantom Learn (08 Jan 2025). What is DePIN? What is DePIN? • https://phantom.com/learn/crypto-101/depin-decentralized-physical-infrastructure-networks#:~:text=Decentralized%20physical%20infrastructure%20networks%20(DePIN,and%20owned%20by%20their%20communities.
Tangem Blog (01 Apr 2025). Top DePIN Crypto Tokens by Market Cap in April 2025. https://tangem.com/en/blog/post/depin-crypto/
a16z crypto (25 Mar 2025). Why DePIN matters, and how to make it work. https://a16zcrypto.com/posts/listicles/why-depin-matters/
DePIN Hub. Geodnet - Explorer. https://depinhub.io/projects/geodnet/explorer
DePIN Scan. GEODNET Explorer. https://depinscan.io/projects/geodnet
Matthew Mousa is Director of Strategy and Research at Alpha Transform Holdings, where he drives insights at the intersection of blockchain, crypto, and AI. He’s also the host of the Alpha Liquid Podcast, spotlighting innovators and trends shaping the digital asset landscape. With a background in investment banking and portfolio valuation, Mousa brings a sharp, strategic lens to emerging technologies and market dynamics. Follow Mousa on X and LinkedIn.
©Alpha Transform Holdings | Disclaimer | Privacy Policy