It doesn't sound "this happens in Mars sort of a thing" anymore when you talk about blockchain-based renewable energy trading systems. Not any more because, for instance, the Exergy project which is run by a U.S. based company called L03 Energy, has been using blockchain and crypto tokens to facilitate peer-to-peer electricity transactions between users on an electricity microgrid in Brooklyn, United States.
Exergy platform combines blockchain, AI and smart meter technologies to create an energy marketplace that facilitates transacting of energy across existing grid infrastructure. Those generating renewable energy can port onto and use the platform to transact energy autonomously in near-real time with consumers on the marketplace, whether those consumers are household users or users in corporate/industrial settings. The distributed system operator also accesses such data as building management systems and manages energy use, load balancing and demand response at negotiated rates.
That's an example of how blockchain and cryptocurrencies or tokens are changing the we we source, trade and use renewable power. Here are seven ways in which the world will approach a smarter energy future through blockchain and cryptocurrencies.
1. Through interconnecting of smart energy and smart devices in order to help lower costs and increase efficiency
Exergy platform, for instance, allows interconnection of power devices such that, it is possible for the platform to monitor customer demand for power on the platform and distribute it accordingly or alert other users when there is opportunity for accessing extra energy. For instance, when an Electric Vehicle (EV) charging station —whether public or private — hooked to the platform has surplus energy, energy consumers can be notified of its availability on the network via a mobile app.
Consumers can also use the app to set energy budgets and do many other things as well. In regard to the, debate about electric vehicles, this can work great. LO3 Energy even partnered with eMotorWerks (part of the energy services arm of mega-utility Enel) last year to test vehicle-to-microgrid integration by connecting Enel’s JuiceNet cloud-based EV charging service with the LO3 energy-transaction system Exergy. This would mark world's first real-world trial for a system that could help EV owners to make smart decisions about charging their cars. EV fleet owners, can therefore, for instance, reduce charging costs because they can respond to price fluctuations in real time or by being paid to have their batteries used on the Exergy platform to provide power to respond to demand.
eMotorWerks now has 6,000-charger network installed across the Golden State, which totals to a combined capacity of 30 megawatts (or 70 megawatt-hours), and it’s actually available to the California Independent System Operator for balancing grid demand. The company has sold more than 40,000 of its smart EV charging stations worldwide. Not only does eMotorWerks provide smart grid control-ability, it also connects users to/with EV manufacturers, supply equipment manufacturers and suppliers of other load-shiftable IoT devices.
In addition to that story regarding Exergy, two companies called Swytch and Energy2market last year kicked off piloting of a blockchain energy trading platform. The piloting program would see 3.5Gw of renewable energy distributed to 500, 000 homes in Germany. In this project, U.S.-based Swytch, which also has a crypto token in operation to power the platform, said it would test the data flow, blockchain, dashboard, estimators, token allocation models and other key parts of the platform. E2m is a Europe-based independent trading company. It is one of Europe’s leading energy aggregators with over 4,500 generating plants and more than 3,700 MW of marketed production capacity.
The U.S.-based company uses the blockchain-based platform to track and verifiy the impacts of sustainability efforts and actions on the worldwide level of C02 emissions. Through the use of smart meters, oracle software, AI and machine learning, Switch rewards companies and people who reduce carbon emissions -- they get rewards in Swytch tokens. Energy producers create Swytch tokens by generating solar, wind and other forms of renewable energy.
Once a person registers their renewable energy assets with the platform, Swytch uses industry standard protocols and security to connect these assets to Swytch blockchain and then Oracle software on which these assets are then verified. The energy generating assets now continue to receive tokens as rewards -- sort of a machine mining cryptocurrency thing.
Each token will even record data relating to the what was produced, where it was produced at, when it was produced, and how much carbon footprint was offset as a result. Thus, this type of data can still be used by those who want the data for green reporting requirements. The platform also allows users to access aggregated data on the platform -- including global production data, forecasted energy usage and production estimations for new sites. This is done by spending the token for this purpose.
Thus, helping to interconnect of smart assets will be a critical application for blockchain and other techs. This will empower smart economies etc. Think of a smart home where all devices are interconnected to allow control remotely.
2. Tokenization of energy and PPA contracts
Any person in the renewable or conventional energy production will tell you how important Power Purchase Agreements or PPAs are in boosting investments in the sector. Blockchain could help re-innovate the way PPAs are or will be done in relation to renewable energy generation and use.
For instance, WePower is developing an Ethereum-based commercial energy trading and procurement platform that will help power producers to fund renewable energy projects by tokenizing the energy they (will) produce. Through digitally-enabled Public Private Partnerships or PPAs, those willing to use renewable energy can contract green electricity at competitive rates from these green energy producers.
PPAs will help sellers hedge electricity prices while users can still make peer-to-peer transactions directly with each other and the sellers, using the Smart Energy Token. Buyers can browse and find their best fit producers of renewable energy, contract them digitally, and monitor generators as they are built and start to generate electricity.
Producers will create auction offers and provide competitive rates in return for long term certainty. It is meant to make the traditional complex and expensive contracting much more easier, cheaper and freely exchangeable. Accounting will also become transparent as a result of use of blockchain technology. Companies can also leverage the platform to understand their electricity consumption patterns.
3. Facilitating consumer and industrial peer-to-peer trading of energy
After making its first commercial deployment in the US, for Northwestern University in Illinois, Power Ledger is also partnering with Australia's Yolk Property Group in a project that will see residents of Evermore’s ‘Solar powered apartment’ of White Gum Valley residential development project do peer-to-peer trading of solar power on blockchain.
A modest 53.6kW solar PV system has been paired with a 150kW lithium-ion battery energy storage system on Evermore, one of the apartment blocks in the White Gum Valley, a residential development near Fremantle, Western Australia. The pilot testing for the project kicked off last year. The pilot was being led by Curtin University, with groups including LandCorp, Solar Balance, Low Carbon Living Cooperative Research Centre, ARENA and CSIRO.
Blockchain-based technology is used to add a transactive layer on the solar-plus-storage installation. The solution was set to meet 80% of electricity demand from the apartment and the project would help to reduce resident's bill by about 30%. This is even as demand for developments that offer more in terms of sustainability, reduced carbon footprint, genuine cost savings and modern technology, increased.
Power Ledger has 3 projects in the North American, 3 in European and 4 in the Australian energy markets and is still expanding its markets. One of their latest projects is a last year's partnership with Sharing Energy company based in Japan. The latter provides installation and solar energy in the country.
The partnership project between the two would see 100 pre-identified customers across Kansai, Chubu and Kyushu regions able to track consumption of renewable energy. It would scale to include over 55,000 rooftops by the end of 2020. The project will initially provide near-instant data to Sharing Energy and in November this year see the use of Power Ledger's peer-to-peer platform to facilitate electricity trading between sellers and buyers using real-time data from existing smart meters. Data would allow infusion of renewable energy to social projects such as as apartment buildings, businesses, etc. to promote a better energy system and lower carbon emissions. It would be one of Japan's latest smart moves since the country has pledged to lower carbon emissions by 26 percent by 2030 in accordance with the Paris Climate Goals.
EDF also recently launched its blockchain-enabled renewables trading pilot rpogram that will see
4. Boosting use of distributed energy resources
Still in Australian energy markets, EnSync is partnering with Michaels Development Company in a 20-year PPA agreement for a project that would finance a 750kW solar PV canopy installation over the parking lot at Keahumoa Place in Hawahii, an affordable housing project. The solar PV system would be connected to a 500kWh energy storage system and EnSync’s ‘True peer-to-peer DC-link’ technology and EnSync’s distributed energy resources (DER) ‘SuperModule’, such that residents are able to not only share but also trade their solar energy based on the energy needs of each individual unit.
This would, in turn, increase efficiency of energy and lower the cost of electricity. The EnSync platform connects to utility meters of each housing unit. Batteries are charged during times of surplus and the system then sends power to other units in the housing development that are experiencing higher demand.
Use of distributed energy resources (DERs) for energy generation and storage is now a common practice and these systems are capable of disrupting and "profoundly" transforming electric systems which today "are predominantly operated with larger generators and managed centrally." Many countries are set to transition from predominantly centralized power systems to hybrid systems according to World Energy Council.
EnSync is also into commercial and industrial energy projects and reported that they have contracted 26 commercial and industrial projects in Hawaii. For instance, it is partnering with Kona Brewing for a 336kW rooftop solar PV system and a 122 kWh battery storage system that integrate into their platform.
5. Facilitating crypto payments for renewable energy and connecting to banking systems
Another company known as Grid+ or GridPlus, has a Grid+ Energy system that connects customers to a smart grid to help them pay their bills with cryptocurrencies and lower their electricity bills. It's the world's first hardware-enforced, automated crypto payment system that connects to a smart grid. By cutting out middlemen, customers are able to reduce their costs by cutting out financial middlemen.
The platform offers the Grid+ Ecosystem, an ecosystem that facilitates storing and spending of digital assets. It works through Grid+Pay mobile app that serves as a crypto app and delegates its security to the Lattice1, a hardware vault, to let the customers spend the crypto as they wish such as making payments by scanning QR code or by using a credit card online. Customers can make purchases and transactions via the app including paying energy bills. The app will delegate these purchases the hardware vault. Plus they also have Safe Card, a debit card that can be used in doing transactions offline.
Grid+ Merchants lets merchants easily accept digital currencies without any fees and charge-backs at their stores and it also allows for direct peer-to-peer payments with their customers and both cab save money and time by cutting out middlemen.
Today, solar and other renewable energy is a little bit expensive in terms of installation cost or capital. There are discussions right, left, forward, back and center about how these costs can be pushed and kept to minimum especially along the lines of helping to reduce effects of climate change and carbon emissions. For instance, there have been huge advancements in the innovation of PV technologies, such that the cost of PV solar units has been decreasing over the years. However, to encourage adoption, renewable energy system plus installation prices/costs need to be competitive enough compared to other conventional methods of energy generation.
6. Facilitating funding renewable technologies in Africa and other economies
Blockchain is great because it facilitates crowdfunding in that projects are able to source for funds for solar projects through ICOs or STOs or other models in addition to venture capital. By helping making available more funds for solar energy tech and innovations, the cost of solar PV and other renewable sources can be reduced greatly. According to Sun Exchange, a blockchain-based solar power platform, crowdfunding PV down to the level of an individual solar cell and leasing them to schools and businesses in Africa could help greatly. Instead of focusing on trading power, Sun Exchange focuses on funding and building new generation systems.
Sun Exchange has been operational in several years and successfully funded four solar power projects. It allows anyone to rent/purchase or invest into solar cells that will then be funded and installed on target locations such as schools etc and the investor can earn back returns (monthly lease rental incomes) based on the amount of electricity produced by his or her solar cells. The cells can earn the investor some income for 20 years and are insured against fire, damage and theft. The investor can choose to be paid in Bitcoin or local currency. From their website, you can actually track projects that are already funded, examples including 117.5 kW at the Sacred Heart College in South Africa, which is a school with 129 years of history and shares facilities with Three2Six Refugee education project, which provides bridging education to refugee children.
7. Facilitating incentive programs for renewable energy producers
According to SolarCoin project, which was launched in 2014 to act as a rewards program for solar electricity generation, the solar energy technology cost is not the problem inside of renewable energy equation because solar energy is now the cheapest fuel in over 60 countries. According to the project, transformation in global clean energy needs acceleration. They aim to make solar energy generation much cheaper by way of incentivizing it.
The reward program has been running since 2010 and is separate from other incentivization programs such as government subsidies or carbon credits and can be claimed by anyone who produces solar energy. Where production data is unavailable, SolarCoins are granted at the rate of 15% of the installed rated DC nameplate capacity per year using an industry standard algorithm.
The scheme plans to reward 97,500 terawatt-hours of generation over 40 years. Anyone hooked to the platform gets one free SolarCoin after generating one Megawatt Hour of energy. Therefore, it acts as an incentive to producers of renewable energy. These coins can be traded on a peer-to-peer basis and in any other currency. A producer willing to claim the rewards finds an affiliate, verifies production, gets SLR wallet and receives SLR.