DePINs Can Fix Cracks in Our Failing Energy Grids, Experts Say

At the end of April, parts of Spain, Portugal, and the South of France faced a major blackout that forced a number of industries to a standstill.

While Spain’s Interior Ministry declared this a national emergency, the reasons for the blackout remain under investigation. However, speculations persist.

Some experts have pointed to vulnerabilities within the centralized energy grid and outdated infrastructure that cannot handle the high volumes of renewable energy that the Spanish energy grid relies on.

The closer we move towards achieving “net zero,” the more energy grids struggle to rely on outdated infrastructures. Could decentralized physical infrastructure networks (DePINs) be the solution?

Table of Contents Table of Contents

1. Key Takeaways
2. What’s Wrong with Traditional Energy Grids?
3. How Can DePINs Help?
4. Can DePINs Truly Replace Centralized Energy Grids?
5. The Bottom Line
6. FAQs
7. References

Show Full Guide

Table of Contents

1. Key Takeaways
2. What’s Wrong with Traditional Energy Grids?
3. How Can DePINs Help?
Show Full Guide
4. Can DePINs Truly Replace Centralized Energy Grids?
5. The Bottom Line
6. FAQs
7. References

What’s Wrong with Traditional Energy Grids?

According to Red Eléctrica Española (REE), or the Spanish National Grid Network, over 50% of the nation’s energy supply comes from renewable energy sources such as solar and wind power.

At the time of the blackout, the country’s energy demand was largely met by renewables, with solar power making up over 50% of the day’s total electricity supply.

It is speculated that the power grid got overwhelmed when a sudden spike in wind power generation came in, throwing off the balance between how much power was coming in and what people needed. While the exact cause remains under investigation, it might have been triggered by a synchronization failure within the grid, likely worsened by its centralized structure.

Massimo Maoret, professor of strategic management at IESE Business School, who specializes in the energy sector and focuses on the green energy transition, explained that the main issue with traditional, centralized energy grids is that they were originally designed around large, stable power plants situated near major consumption centers, like cities.

Maoret told Techopedia:

“Renewable energy sources … introduce new challenges because they produce intermittent, variable power and typically have lower system inertia. Additionally, renewable generation sites are often located far from energy consumers, complicating power transmission and grid balancing.”

Another issue is that traditional power grids are designed to move energy from the top down. This means that a few power plants produce energy, which is then distributed by a couple of operators to cities, towns, and homes that passively consume this energy.

Kai Siefert, founder at Combinder, a DePIN project building a decentralized energy infrastructure on the Peaq network, explained:

“In short, traditional energy infrastructure is very centralized with little flexibility. What that means is, when one substation or grid goes down, there’s often no plan B, which can lead to catastrophic events.”

The recent blackouts highlight the need for continued investments in advancing grid infrastructure, storage technologies, and demand-side flexibility solutions, Maoret noted.

Decentralized grid models could be the solution.

How Can DePINs Help?

While current energy grids include compartmentalization that helps limit cascading failures, they still rely on centralized coordination.

According to Ruchir Punjabi, co-founder and CEO of ReNRG, many traditional grids still lack internet integration, meaning they transmit power without accompanying data, instructions, or real-time coordination. These are critical as renewable energy sources grow more prominent and volatile.

This is where DePINs come in handy. Punjabi told Techopedia:

“Instead of relying on top-down control, DePINs leverage distributed data and incentivized participation to improve fault detection, real-time load balancing, and overall grid resilience.”

ReNRG is building a decentralized physical energy network (DePEN), a DePIN subcategory, that is tokenizing renewable energy access in the Global South.

Punjabi explained:

“While renewable energy is great for the environment, it is also destabilizing the power grid due to its unreliable nature. DePINs, on the other hand, can help mitigate this by activating distributed energy resources (DERs) already present in homes, such as solar panels and batteries. These can also be networked into Virtual Power Plants (VVPs), allowing neighborhoods or even entire cities to supplement or stabilize the grid in real time.”

DePINs scale from the bottom up. This means there’s no need to overhaul an entire city grid at once – only a critical mass of connected nodes (such as homes, buildings, or EVs) that are actively participating in the network.

“In practice, early DePIN deployments could support districts or communities almost immediately. Scaling to whole cities would take longer, but it’s entirely feasible with the right incentives and regulatory support,” Combinder’s Siefert said.

Can DePINs Truly Replace Centralized Energy Grids?

DePINs will most likely not be able to replace centralized energy grids; however, they do not have to. What DePIN technology brings to the table is not overthrowing the old system but upgrading it.

Siefert told Techopedia:

“The most powerful setup is one where centralized and decentralized systems work together. You can think of DePINs as a kind of energetic safety net. When the centralized grid is running well, DePIN nodes can feed in excess energy and help optimize usage. But when the grid stumbles (as it did in Spain and Portugal), a decentralized layer can kick in locally, keeping key infrastructure running.”

However, implementing renewable energy DePINs on a wider scale also comes with its challenges.

ReNRG’s Punjabi noted that since DePINs run on blockchain technology, one of the biggest challenges in their adoption is usability, especially for stakeholders who are not crypto-native, as the complexity of onboarding, managing wallets, and interacting with decentralized systems can be a major barrier for adoption.

“There’s also the issue of infrastructure. Many DePINs require users to set everything up themselves, which isn’t very practical. That’s why ReNRG is more focused on a managed DePIN model that simplifies deployment and removes friction for users,” Punjabi added.

A shift towards renewable energy DePIN solutions would also be a question of trust: how can we ask people who have relied for years on traditional top-down energy models to switch to a decentralized one where everyone is an active participant in energy generation and use?

Siefert concluded:

“That’s a cultural shift as much as a technological one. But once people see the benefits, that shift can happen quickly.”

The Bottom Line

As renewable energy becomes more dominant, traditional grid systems are showing their age.

While energy DePINs are emerging as a promising solution, widespread adoption might be hindered by significant challenges, from infrastructure hurdles to usability concerns.

Selective deployment in critical sectors like hospitals, transportation, and communication networks could be a practical first step, Maoret said.

And projects like ReNRG and Combinder are already leading the way, showing that decentralized infrastructure can complement existing systems and build resilience where it is needed most.

FAQs