Energy Blockchain

I recently had the opportunity to attend a 2-day design thinking workshop led by IBM (particularly Jos Roling and Peter Patterson ) on the topic of  blockchain applications in the energy industry .  Despite the formal process, it was incredibly insightful and informative. Amazingly, we were able to get in the room - for 2 days! - the key people who really need to be involved if you're actually going to be able to make a difference in the energy industry.  We had: - the Market Operator - the Local Distribution Company - the Distributed Energy Resource (DER) provider - the Payment Experts - the Blockchain Developers and SMEs We had a very productive 2-day session focused on identifying and defining the problems in the energy industry that can be solved by an energy blockchain and the applications that it can facilitate.  We brainstormed, we argued, we learned.  There were a lot of sticky notes used. You can't come up with  solutions that will make...

In a previous post , I talked about the differences between distributed ledgers and blockchains. Another somewhat controversial topic in this space is the debate around public versus private blockchains.  Grid+ , a startup attempting to make it possible for consumers to participate directly in energy markets, has a recent blog post called "No Country for Private Blockchains", in which they articulate a good argument for the public blockchain.  They are deploying their solution on Ethereum and feel that the public blockchain approach helps to spread the cost of the shared infrastructure, makes it more secure, and increases value by ensuring that state changes are on the public chain.  Another energy blockchain application startup, PowerLedger , in Australia seems to be taking a hybrid approach using a public+consortium blockchain - for now at least.  Given the high degree of privacy and security that is required to participate in the energy industry today, it's an im...

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...

Blockchain technology will play a key role in the transactive grid of the future. A blockchain is an immutable, distributed, shared ledger that makes it possible for energy and energy-related financial transactions to be securely recorded and settled. Not all blockchains are created equal, however. A blockchain that would be able to support the complex services and interactions fundamental to managing energy grids and markets has very specific requirements related to its consensus and storage models, and services for identity, access control, and contracts. Before we can define what those requirements are, it’s important to first understand the use cases and applications that the energy blockchain would support.  A report from late 2016 by the German agency, dena , provides a very good overview of several key use cases.  They conducted a survey of German energy executives which provides great insight into how blockchain can and is being used by the energy industry. This e...

Blockchain has become a buzzword, unfortunately. Blockchain has been touted as the silver bullet that will solve problems in almost every industry. This is problematic, because, when a new technology gets this kind of hype, people will start to apply the technology in ways that don't necessarily take advantage of its core strengths, leading to disappointment when the results aren't as great as hoped. And then the technology gets blamed and people use it as an opportunity to point out how the technology isn't ready or isn't as great as everyone says. Startups will pop up and fail, leading to more speculation about the technology not being ready or as good as hoped. Startups that have real, good solutions, will suffer from the mistakes others make. Jon Evans published an interesting perspective on this in May 2017 in an article titled "Blockchains are the new Linux, not the new Internet." He makes an interesting argument for thinking about this more rati...

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...

I have spent more than 15 years working to advance distributed energy resources (DERs), at this point, and it's clear that DERs are technologically to the point where they have been proven time and time again and can be relied on like any other utility or grid assets.  However, it's still very difficult to monetize the value that DERs can provide because there are not mechanisms in place, in most energy markets, to compensate them for what they can do.  For startups that are trying to commercialize services that can be provided by distributed energy storage systems like orchestrated behind-the-meter load control and/or solar+storage, it's very frustrating to know that these products can perform as well as traditional utility grid assets, but can't be paid for doing so. The next area of innovation in clean energy must focus on solving this problem.  The technology barriers are not what they once were.  DER hardware and software are advanced enough to provide consis...