The Energy Web Foundation (EWF) recently announced the release of a new white paper, The Energy Web Chain: Accelerating the Energy Transition with an Open-source, Decentralized Blockchain Platform. The paper offers insight into the first open-source blockchain designed specifically for the energy sector.
The report includes a detailed look at, among other things, specific examples of how blockchain can help the country move to a decentralized, democratized, decarbonized and digitalized resilient energy system. Three examples EWF provides are:
Decarbonization Through Solar
The EWF whitepaper notes that blockchain can help reduce soft costs associated with community solar projects. “Using smart contracts, a community can establish partial asset ownership, governance, and profit division so the entire process of owning one piece of an asset is automatic, trusted, seamless and much less costly,” WEF researchers write.
Blockchain can also help on the revenue side, the paper notes. “Currently, community solar projects are constrained by geography. Using a blockchain, production of the community solar project can be shared via the chain for a global set of potential contributors opening new and geographically diverse sources of revenue.”
Decentralizing the Grid
Customers are increasingly adopting distributed energy resources (DERs). As the report notes, collectively, these devices could serve the same function as centralized thermal power plants. However, they are rarely used to their full potential since they are naturally decentralized and distributed, making secure digitization, coordination, control, tracking, and financial settlement with each device expensive and oftentimes cyber- insecure. Furthermore, the process of aggregating devices into a single grid participant is difficult given the market interests of each individual device manufacturer.
“Blockchains could enable grid operators to overcome many of these challenges, effectively re-architecting the grid from the bottom up,” WEF researchers write. “Imagine being able to automatically connect a new appliance or entire microgrid to a secure, decentralized platform that incents devices — acting on behalf of their owners — bto use or not use electricity at certain times via detailed, close-to-real-time price signals. Imagine renters or homeowners participating in new electric markets by simply setting their home to ‘economy mode,’ making their devices available to grid operators and perhaps being paid to do so.”
Renewable Energy Certificate Tracking
To respond to commercial interest and government regulation, renewable energy certificates and guarantees markets have emerged in the United States, Europe, Australia and elsewhere. While these markets have noble intentions, their administration is highly manual and costly, rendering the markets opaque, high-cost and inaccessible for most smaller participants. In addition, these analog, largely manual markets are not able to support any higher-level functionality such as consumption-linked purchasing, carbon-impact selective purchasing, or renewable generator aggregation.
“Why can’t buying renewable energy credits be like buying an airline ticket–allowing buyers to search for exactly what they want and allowing sellers to join forces to get a buyer to their desired destination?” EWF researchers ask. “Blockchains can create such a system for renewable energy.”
Other topics in the EWF white paper include:
–PoA Consensus Mechanism: EWF’s Energy Web Chain uses a particular version of Proof-of-Authority consensus that offers speed, lean energy consumption, and a degree of validator node oversight that should be appealing to energy-sector regulators.
–Governance by Gas: Compared to blockchains such as Bitcoin, which put governance “power” into the hands of anonymous block miners, EWF’s blockchain empowers application developers through “governance by gas,” in which developers’ voting power is weighted by the gas throughput of their applications on the Energy Web Chain.
–Private Transactions: In order to allow confidential electricity market information on the Energy Web Chain, EWF and its technology partners have developed a novel approach for “private transactions” that shield sensitive information from public eyes while retaining the auditability and verifiability of blockchain-based transactions.
–Parachains: To meet scalability and throughput needs for energy-sector applications of blockchain technology, EWF will be exploring parachains (i.e., parallel blockchains) in concert with relay chains and bridge chains as a way to both foster blockchain interoperability and achieve theoretically infinite scaling.
EWF is planning the Energy Web Chain’s genesis block around the Q2–Q3 2019 timeframe.