Skip to main content

Democratizing Energy Markets

Audrey Zibelman, former NYPSC chair, Jon Wellinghoff, former FERC chair, and others in the industry have described visions where distributed energy resources (DERs) are plentiful and active contributors to a dynamic and efficient grid of the future. Though the technical capabilities of DERs to provide valuable services to the grid have been proven, market and regulatory barriers exist which prevent DERs from being able to monetize the value they provide. Currently, the tools and processes in place in the industry to securely manage contracts, transactions, and settlements are not positioned to be applied to many small DERs and it would be prohibitively expensive to do so. A mechanism for efficiently, cost effectively, and securely managing the contracts, transactions, and settlement activities of many DER participants in near-real time is needed to make it practical for DERs to contribute to grid management on a large scale.

There are several key elements that need to be in place in order to make this future grid a reality. These include: 1) the technical capability of DERs to be responsive in real time to consumer, grid, and market needs, and to balance those priorities and commitments automatically, 2) a way to value the contributions of DERs through locationally- and temporally-specific pricing, 3) a mechanism for practically, cost effectively, and securely managing the contracts, transactions, and settlement activities of many DER participants in near-real time, and 4) a market and regulatory structure that supports, encourages, and incentivizes DER participation for maximum benefit.

Companies working on VPP (virtual power plant) software platforms currently have #1 well underway, and some would argue they are already there.  See Navigant's recent scorecard on VPP platform technology leaders here for more information.  Similarly, companies and organizations have been analyzing and researching approaches and solutions to #2 for some time.  It's not easy, because these values vary from grid to grid and market to market, but we're getting there.  See this article from Utility Dive for more insight on the process of monetizing the distribution grid.

Blockchain technology is very well suited for #3.  Defining, testing, and launching projects to demonstrate the benefits of blockchain or distributed ledger technology for the energy market is critical to being able to move to #4.  Luckily, many are now attempting to do just that, and there are several good projects in the industry looking at how to apply blockchain technology to energy.  Check out the cool, interactive map of blockchain projects in the energy industry here, by Indigo Advisory.  There will be many more to come.
Labels:

Comments

Post a Comment

Popular posts from this blog

What is Power Ledger's play in the energy blockchain space?

Power Ledger is building an energy blockchain platform to connect all of the players of the energy ecosystem together - prosumers, consumers, market operators, utilities, etc. They want to “enable interoperability between diverse market management/pricing mechanisms and units of electricity (kWh) by way of pre-purchased tokens.”  Here's my take on what they are up to. Business Model / Offering Power Ledger's offering is a blockchain-based platform that facilitates participation by “all” parties in the energy ecosystem, called the Platform. Utilities and other 3rd-party businesses that will facilitate trading on the platform are called Application Hosts. Examples of Application Hosts include energy retailers, property managers, and EV-charging businesses. Participants are the consumers or non-Application Hosts and the users. There will or can be an unlimited number of applications that run on the Power Ledger Platform. The first, and only one currently available, is FuseBox...
Post a Comment
Read more

Intro Topic: Distributed Ledgers vs. Blockchains

What's the difference between distributed ledgers and blockchains?  "Bits on Blocks" published a brief introduction on this topic earlier this year.  The key takeaways from that article are pretty high level but still helpful when thinking about this.  For example, this: If you want to include all the initiatives going on, use the term “distributed ledgers”. If you mean blockchains, where unrelated transactions are bundled into blocks, which are chained together using hashes and (in most cases) broadcast to all participating entities for batch processing, use “blockchains”. If you like acronyms, use “DLT”: Distributed Ledger Technology Colin Pratt also provided some very interesting detail on this concept along with a discussion on taxonomy in general in his blog post "Thoughts on the Taxonomy of Blockchains & Distributed Ledger Technologies." Colin highlights that Bitcoin's blockchain has some key features that really illustrate what makes it dif...
Post a Comment
Read more

Can Grid+ actually disrupt energy markets in the US?

Overview Grid+ spun out of, and is owned by, New York blockchain development house ConsenSys.  ConsenSys, which uses blockchain technology to create applications in many different fields, identified the opportunity to create a solution for the energy space.  The goals of Grid+ are to demonstrate production-ready blockchain-based energy solutions at scale in competitive commercial environments in order to enable the transactive grid of the future and prove the advantages of Ethereum over incumbent technologies. To get started, Grid+’s strategy is to become an energy retailer in Texas and to win customers by offering energy savings compared to the incumbents.  They will use their own hardware solution for energy management combined with efficiencies from trading using Ethereum.  Their hardware solution is called the Intelligent Agent.  It is a computer that basically pays for the customer’s electricity use in real time by reading from the smart meter. The Inte...
Post a Comment
Read more