7 use cases where Energy needs match with Blockchain technology
(Original LinkedIn’s article)
IEA projects the global Energy Demand to a continuous growth for the next years due to Global Economy expansion and a increasing domestic need for comfort (20-25% of the whole).
The paradox of the modern lifestyle is that “the consumption of energy services for everyday mobility and domestic life is a fundamental precondition for participating in many contemporary societies”
There is a direct relationship between energy generation and carbon emissions, if today mix of sources won’t change: CO2 output will rise during the same time, unless significant changes to how exploit these resources. As CO2 is one of the detrimental mean for the Climate Change, to stop it, you need either to reduce Demand or to choose not contaminating resources, better if both at the time.
As the paradox of the modern lifestyle is that “the consumption of energy services for everyday mobility and domestic life is a fundamental precondition for participating in many contemporary societies”, it seems more realistic to strive for the second chance: to reduce contaminating resources, or decarbonizing the economy, by not relying on fossil fuels, rather to exploit renewable one. Nevertheless, it is important:
- not to leave a catastrophic inheritance for next generation (from the environmental point of view),
- to configure full energy access for everyone around the World, fighting energy poverty
- to empower consumers with full information to make them decide how to be active part in the process making energy system more sustainable.
The technology state of the art allows consumers to be aware of their consumption, to install electricity micro generation and storage systems and to govern distributed Grids (through AI algorithms, so turning a centralized governance into a decentralized one, through Neural Grids).
To assure a transparent governance of Energy System, Blockchain can be the answer, even though not the cure for all the problems. For this reason, it fits with, at least, 7 use cases.
It is demonstrated that the current Energy System is inefficient and it wastes a large amount of its production: in United States, 70% in end-to-end transportation, as well 65% of electricity and 20% in useless industrial processes.
Since USA, China and India are accountable of 70% of the Global Electricity Demand, it would be worthy not only to rethink the sources to generate energy from (i.e. renewables should replace fossil fuel sources), but also to deploy Demand-Response utility governance where to minimize any source of waste, whilst designing a Neural network to direct energy along a grid, based on domestic or industrial punctual needs and use times.
Consumers needs to establish smarter systems of consumption: through the tokenization and trade of energy
The economic balance will benefit though: less ancillary costs and other items, which in Europe weight with 40% of energy bill for end users, around €100 billion per year. Nevertheless, creating a culture of a more sustainable consume directly benefits individuals, without necessarily limiting their electrification process ongoing. To step ahead in this way, consumers needs to establish smarter systems of consumption: through the tokenization and trade of energy.
Tokenizing energy can be seen as a more easily way to exchange between supplier and customer, as well as through Energy Community’s micro grids would likely be incentive for renewable energy source adoption. The optimum is reached if prosumers and consumers can trade among themselves, rather than opting to temporary excess storage: on this basis, varying supplies and demand will enhance the viability of non-traditional energy sources. At the current extent, it is worthy to start the process of tokenizing either less-sustainable energy and renewables, in order to reach a quantifiable asset to be traded, propelling traceability and defined per-unit value of this commodity.
Tokenizing energy can be seen as a more easily way to exchange between supplier and customer, as well as through Energy Community’s micro grids would likely be incentive for renewable energy source adoption
Enterprises working on Energy tokenization
- Grid+ – Tokenization project from the team at ConsenSys
- Co-Tricity – Partnership between ConsenSys and Innogy, virtual energy market on the Ethereum blockchain
- MyBit –Crowdfunding solar panels on the blockchain
- WePower – Tokenized green energy trading platform
- Smappee – Gain accurate, real-time insights into energy consumption and energy guzzlers
Micro Grid are traditionally the essence of centralized power grids, as once the crown jewel of engineering. Since the evolution of the economy and the Demand has changed, they now are more a source of inefficiency and massive energy losses. Estimation of energy losses, for resistance, is at 6–8%, in economic terms around $20 billion annually. If you consider Schneider Electric’s study (2013), energy losses can rise to 15% of net generation, so more than $70 billion (2014) every year.
Blockchain best fits its distributed ledger technology (by design) with the above mentioned needs, allowing users of these micro grids to monitor consumption and execute energy transactions
The idea or need to slice Macro Grid into Micro Grid came out to remedy these transportation losses to cover long distances from central production to end users. By distributing Energy Grids, the decentralized system takes advantage of more energy efficiency (by design), as well to leverage of new distributed sources of generation from renewables’ self-sustaining properties.
For this reason, blockchain best fits its distributed ledger technology (by design) with the above mentioned needs, allowing users of these Micro Grids to monitor consumption and execute energy transactions.
Enterprises working on Micro Grids
- Drift – Helping source power locally and creating more efficient grids.
- LO3 Energy – Field tested microgrids
- Omega Grids – Micro grids
- Tecnalogic – Balancing Demand and Offer in real time and propelling Neural Grid distributed model
- Hive Power – Consultancy services to optimize existing electrical distribution grid
Peer-to-Peer or Energy Community Energy Trading
Wherever Regulation has made available a framework to implement this kind of trading, there is a lot of room to develop a Peer-to-Peer market where individuals can buy and sell energy. The other opportunity comes from aggregating individuals, building and industries into Energy Communities.
Since compensation of energy generation must be in real time, the only available option, to make it possible and flexible, is to leverage energy storage and battery technology to expand the opportunities.
By 2030, energy storage innovation will be funded with more than $100 billion. As consequence of massive investment in solar photovoltaic technology from 2010 to 2015, the energy storage market is expected to double six times, during the following 15 years. The expectation is that they will produce as saving (between $25 and $50 millions for residential, commercial and industrial consumers), because batteries capacity will be increasing exponentially, despite of modest gain in early years. This study explains these figures.
Much of these savings is projected to come from users having more autonomy over energy trading — namely, the ability to pay for energy as they need it, and sell any excess energy, all thanks to improved storage methods, including batteries. A digital, blockchain-based platform for tracking energy stores and facilitating transactions has been proposed, as its distributed ledger offers a reliable, cost-effective platform by which energy-trading peers can connect.
Enterprises working on P2P energy trading
- Conjoule –P2P Energy Grid
- Power Ledger – Renewable energy and environmental commodities trading
- Omega Grid – Blockchain Energy Rewards Platform
- Deep – Decentralized Energy Exchange Platform
- BeChained – Marketplace for electricity from renewables, connecting Energy Communities
- Alliander – bringing an open and sustainable energy market closer to the consumer
Rewarding Renewable Adoption
IEA‘s adherents committed to reach 67% of energy production from renewables by 2030, 80% by 2050.
Although the amount of electricity consumption from renewables increased 67% from 2000 and 2016 in USA, that last year only 15% of electricity was generated from clean sources, and in that Country the growth trend was poor than other emerging (China and India) and established economies. In 2017, renewable sources compensated 50% of the growth of global power generation, Americans see little financial incentive to adopt as it never hurt any industry’s cause.
Several startups were born, relying on blockchain technology, to improve financial reward, where tokenized energy is often compensated with cryptocurrency.
Enterprises working on rewarding renewable adoption:
- Greeneum – Decentralized platform that incentivizes green energy investment
- Swytch – Rewarding solar users with tokens
- M-PayG – Off-grid low-income households and businesses to access solar energy through small-scale mobile repayments.
Accelerating Adoption of Electric Cars
Electric vehicle adoption is a hot trend topic during next years, as in recent past, it demonstrated an exponential growth with the 200.000 EVs sold in 2017 and 350.000 EVs in 2018 (only in USA, +80%). In circulation, there were 1 million in 2017, and — accordingly with Bloomberg’s expectation — by 2025 they will be more than 10 million, finally by 2030 there will be three time more.
Manufacturers and regulators are moving to propel this trend, as UK and France announced to ban gas and diesel vehicle by 2040; Volvo would like to be the first of top manufacturers to become all-electric.
More EVs implies to invest in infrastructure in terms of creating more points (for instance, public recharge point followed sales trend in USA, increasing 28% in 2018) and in their delivered power to provide an adequate recharge user experience.
Using blockchain technology, it is possible to create a dynamic pricing system, monitoring peak energy prices in order them to be maintained affordably and practically
To accompany this growth, it might be necessary to absorb available power from distributed generation systems (as private charging stations) and to allow a suitable system for trading energy between drivers. For this reason, Energy will become an asset to be traded and shared, in exchange of congruous price.
Using blockchain technology, it is possible to create a dynamic pricing system, monitoring peak energy prices in order them to be maintained affordably and practically. Charging station owner should permit informed decision about when and where to charge, as well as transparency in transaction pricing for their services.
Enterprises working on boosting EV adoption
- SolarCoin – Despite of not automotive, a compelling use case for how electric vehicle providers could incentivize adoption
- Oxygen Initiative – Suite of eMobile solution to help EV drivers
- Slock.it – slock.it connects devices to the blockchain, enabling the economy of things
Reducing and Tracking Carbon Emissions
Among the IEA’s Development scenario goals, there is the reduction of GHG (Green House Gas emissions), and especially Carbon dioxide, as responsible for almost 3 quarters of them.
20%-25% of Global Energy Demand came from domestic appliance. In USA, it contributed to 10.3% of the total carbon emissions of 2016.
The capability to tokenize energy credits with blockchain can drive to this goal, and it brings the opportunity for carbon offset credits to be more easily issued
The primary measure to lessen its growth rate is to empower consumers by informing which sustainable and environmental suitable behaviors to adopt, by showing their consumption data and binding them to emissions. The capability to tokenize energy credits with blockchain can drive to this goal, and it brings the opportunity for carbon offset credits to be more easily issued.
These credits can represent a two ways incentive to encourage adherence to emissions standards: at first, they can be purchased by companies and individuals, willing to compensate for their current above the limit pollution system, from those others with low emissions production; secondly, used as a punitive measure to limit those who perseveres in this bad habit. This revenue is typically reinvested to reduce emissions in other ways, so fitting an interoperable, cost-effective system to further the mission of reducing carbon pollutants can only increase the amount available to reinvest in new environmental projects and technologies.
Enterprises working on tracking carbon emissions
- Veridium Labs – Tokenizing carbon credits
- FlexiDAO – Helping Energy Retailers enhance green energy offerings by matching origin of renewable energy production with consumption
Decentralizing Clean Energy Investment
Among Global top 3 Electricity Producers China, USA and India, United States keeps on being the second-largest growth market for renewable sources. India reached 90% of its energy growth capacity from clean sources.
Compensation with renewable energy credits can be a temporary solution, but it should never stop evolving the Energy Grid and deploying the Transition from fossil fuels to cleaner sources
The biggest challenges are either tracking that energy generated from renewables, as it moves along the supply chain. To compensate this difficulty, compensation with renewable energy credits can be a temporary solution, but it should never stop evolving the Energy Grid and to deploy the Transition from fossil fuels to cleaner sources.
The blockchain technology, by design based it on mutual consensus of nodes, is surely the most viable and effective candidate for issuance and verification processes
REC tracking systems are expensive and fragmented. Their remuneration varies by service. Unfortunately, none effectively counteracts the persistent problem of double counting, which occurs when two parties claim the same renewable energy asset.
Since RECs require third-party authentication, the blockchain technology, by design based it on mutual consensus of nodes, is surely the most viable and effective candidate for issuance and verification processes.
Enterprises working on decentralized energy investment
- FlexiDAO – Helping Energy Retailers enhance green energy offerings by matching origin of renewable energy production with consumption