Blockchain is often hailed as the poster child of utility technology transformation. The word has drummed up even more interest in the sector of late, and there are certain companies who are leading the charge.
But a lack of understanding and the negative perceptions of blockchain are putting many utility companies off taking up the technology.
At a recent Utility Week-Wipro Technology and Innovation Council workshop, Wipro lead consultant Muneeb Iqbal Shah warned: “We have to be very careful not to confuse blockchain with bitcoin or cryptocurrency.” Put simply, blockchain is a method of recording data – a digital ledger of transactions, agreements and contracts. The big difference is that this ledger isn’t stored in one place, it’s distributed across several, hundreds or even thousands of computers around the world.
He pointed out that blockchain itself is not a new technology, and has been around for two decades or more, albeit in a nascent form. Yet whilst there was a consensus in the room that blockchain will not hit the mainstream for another 5-6 years, there are some early adopters who are already exploring the benefits the technology could have in their sector or for their business, and who are even beginning to implement it.
Here Utility Week takes a look at some of the blockchain pioneers.
Energy Web Foundation
The Energy Web foundation (EWF) is a test network, which was first unveiled last October. It was co-created by the Rocky Mountain Institute and Grid Singularity, representatives of which are on its “Foundation Council”. The test network’s principal and co-founder, Jesse Morris says dozens of companies have been experimenting and trialling their applications on the platform over the last 12 months.
Morris recently told Utility Week, during an interview for a premium report, that the test network is a “sandbox for innovation” and will be able to support a variety of applications all over the world, from peer-to-peer trading to managing inter-connecting microgrids. “There are well over 100 start-ups or projects focused on the nexus of blockchain and energy,” he added. “Almost every one of those projects is focused on the application layer. These companies have specific hypotheses about where value can be unlocked in the energy sector using blockchain technology.”
At the Utility Week-Wipro event, Foundation council member and chief operating officer of Grid Singularity, Ana Trbovich, said the network had recently held a summit – Event Horizon – at which 41 blockchain energy start-ups had pitched. These included, but were not limited to, Slock-it, Share&Charge, Electron, Hive Power, Liquidity Network and The Sun Exchange.
“All of these start-ups, though, are using different platforms,” said Morris. “Some are using the public Ethereum network. The Enerchain project is running on the Tendermint software.”
He says that, in about a year’s time, EWF intends to release the genesis block of the chain, which will mean it will be a living, thriving system with a governance structure up and running, validator nodes doing their jobs and actual tokens with real value flowing across the network.
“Right now, the Energy Web Foundation makes decisions for the energy web chain since it’s just a test network,” he explains. “What’s going to change is the governance structure will be put on the blockchain. The validator nodes will continue to perform an auto-updating function on the blockchain, but then we will allow developers to vote on protocol changes.”
Electron
London-based software framework Electron claims to be leading the British blockchain charge with a flexibility trading platform that could revolutionise the market for both suppliers and consumers. The technology company – headed up by former Npower boss Paul Massara – has developed a common trading venue for all demand-side response actions to enable collaborative trading in the current hierarchical system, as well as peer-to-peer and microgrid integration.
It has also developed a shared asset registration platform for all UK gas and electricity supply points to facilitate faster switching, which is now being extended to cover new types of distributed assets.
Electron’s chief operating officer JoJo Hubbard told Utility Week recently that the platform will play a vital role as the energy network becomes more and more distributed. “The asset register tracks all the transactive assets in the system: what they are, where they are, what permissions they have and what inherent value traits they possess, e.g. location or response profile.” She added: “Essentially it is a data coordination platform that can be leveraged or extended for multiple use cases.”
Electron held its first “hackathon” in February to test its new platform, which is still at the development stage.
Massara says it is between 12 and 18 months away from being rolled out in the UK and they have also had expressions of interest from five other countries. “We feel at Electron there is a massive problem in how you integrate all these energy generation, storage and IoT devices and assets into the system and create a new digital backbone for distributed energy,” he adds. “With our model, we feel very confident that we have a solution to this integration problem and it is unlocked by blockchain.”
Verv
In April, in the London borough of Hackney, the UK’s first physical trade of energy on a blockchain was made. The trade was on a trial network on the Banister House Estate, which has been developed by Verv in collaboration with Repowering London and saw 1kWh of energy being sent from an array of solar panels with excess energy on one of the block’s roofs, to a resident residing in another block within the estate.
Solar panels have been installed on 13 of the blocks of flats that make up the community, with Verv smart hubs in participating residents’ flats, and Powervault batteries in communal areas. According to Verv, the platform can calculate the energy demand profile of homes, determine the solar energy supply in each storage battery and in turn allocate green power to residents based on their needs.
Speaking to Utility Week, Verv’s chief executive and co-founder Peter Davies says blockchain is a very powerful tool for peer-to-peer trading, because it has several features built in, which make transacting and accounting very simple.
The water retail market
MOSL’s digital strategy committee chair Nick Rutherford suggests blockchain could revolutionise the non-household water retail market, which opened to competition in April last year.
He says the water market is ripe for the take-up of the technology, as it is “centralised and new”. “We’re heavily reliant on asset and meter read information, which is shared across multiple stakeholders across the industry.”
He told the Utility Week-Wipro workshop event: “We’re a small market which is simple in comparison to the energy sector – there are only retailers and wholesalers in our marketplace.
“But also, we’re going to grow, both in terms of functionality, but also in terms of demographics, so as and when domestic competition is introduced into the water sector, that’s going to increase our footfall from 1 million customers to maybe 60 million customers.”
Blockchain could streamline processes such as new connections and customer switching and settlement – which are currently laborious and “admin-heavy”.
By cutting out certain parts of these processes, the use of blockchain – a digitised, decentralised, public ledger of all cryptocurrency transactions – could make them instantaneous, Rutherford suggested. Currently, the settlement process can take anywhere between 30 and 60 days.
Rutherford also believes blockchain would create the opportunity for new marketplaces, products, services and essentially employment in the water retail sector.
Committee members are now considering how blockchain can be used to move the water retail market forward. “We definitely believe that there are benefits from using this technology within our market,” says Rutherford. “And the opportunity is now.”
GRAPH: the process for a new connection before and after blockchain
Electralink – tentative first steps…
Electralink was founded in 1997 by the energy industry to provide regulated data transfer services and has now evolved into a dual fuel solutions business with governance services and energy market insights, all geared to solving industry problems.
The company says it recognises the potential importance of blockchain to the utility industry but points out that it is “not a panacea” and will create challenges for the market. “We are actively researching the potential of the technology and finding potential solutions to maximise blockchain’s value,” said Electralink technical architect James McDonagh at the Utility Week-Wipro workshop.
He said the company is not currently looking to implement blockchain but is considering its options for innovating in the space.
Read Utility Week’s premium report on blockchain in full here:
