How blockchain can manage the future electricity grid

Energy Grid 2018

UN Photo/Gill Fickling South Africa’s reliance on coal is clear to see. The coal-mining process can leave water supplies unusable for irrigation, for industry and for consumption. The water is not just dirty, but toxic.

This article is brought to you thanks to the strategic cooperation of The European Sting with the World Economic Forum.

Author: Sam Hartnett, Team Member, Energy Web Foundation and Peter Bronski, Marketing and Communications Lead, Energy Web Foundation

Every month, it seems that blockchain’s potential to revolutionize the energy sector is proclaimed anew, from Wired Magazine announcing that “microgrids and the blockchain are powering our energy future” to Renewable Energy World claiming that “blockchain could change everything for energy“.

There’s a growing degree of certainty that blockchain will transform the energy system. But the question is how.

Blockchain or not, the grid is fast changing from the old system of analog, fossil-fuelled, centralized generation and transmission to a new paradigm defined by a high percentage of renewables, especially solar and wind, and customer-sited smart technologies, such as rooftop solar, battery energy storage, electric vehicles, smart thermostats and more.

In May, more evidence of this fast-approaching future appeared. Firstly, a report from Rocky Mountain Institute found that in the US alone, as much as $1 trillion in future investment and fuel costs for natural gas power plants through 2030 could be stranded by cost- and technology-competitive combinations of renewables and smart devices. Secondly, Reuters reported that two major US utilities, serving 5.5 million electricity customers across 12 states, said that they are “done building combined cycle natural gas-fired power plants”.

But how will we manage an electricity grid with billions of connected, customer-sited technologies in an era when Tesla’s South Australia virtual power plant (VPP) – currently hailed as the world’s largest – looks like a mere drop in the ocean? The approach to date has largely been to “bolt on” solutions, such as centralized Internet of Things (IoT) cloud computing, to manage distributed solutions such as VPPs and microgrids.

Yet this approach will eventually create limitations. A more distributed and decarbonized energy future requires a more decentralized solution, in order to make the leap from the legacy grid of yesterday to the most fully realized grid of tomorrow. That’s where blockchain becomes central to the story.

At the Energy Web Foundation (EWF), in collaboration with more than 50 affiliates from around the globe, we are developing an open-source, scalable blockchain platform tailored for the energy sector. The Energy Web chain is designed to handle the transaction throughput required from the fast emerging decentralized, internet-connected electrical grid.

We are also building the Decentralized Autonomous Area Agent (D3A), which gets even more directly to the heart of how we manage and operate a heavily decentralized grid. The D3A is a transactive energy market design platform operating on top of the Energy Web chain. It offers a framework that pushes the bounds of what is possible, running the electricity market in an entirely different way. Rather than take the legacy centralized system and try to extend its reach ever deeper into customers and devices at the grid edge, it flips electricity grid balancing on its head.

The D3A balances the grid from the edge up, not the top down. In matryoshka-like fashion, at every scale of the grid – from individual devices, to buildings, neighbourhoods, and regions – the D3A nests hierarchical markets, coded as blockchain smart contracts, which govern the transactions that balance electricity supply and demand. In this way, the D3A functions like pieces of digital DNA, providing the foundational blueprint for each “cell” of the system without centralized dispatch, like a conductorless orchestra playing a harmonious symphony.

“This alternative approach is capable of achieving a high uptake of renewables, provides the greatest degree of freedom for consumers, enables broader market participation, and increases grid resilience to both physical and cyber disruption”, explains our colleague Sarah Hambridge, D3A product owner for EWF.

This is the real future of transactive energy (a popular buzz phrase these days, including in blockchain circles). It is not just theory – it is becoming reality.

In April 2018, at Event Horizon in Berlin, EWF unveiled a D3A proof-of-concept simulation environment, in advance of an open-source simulation tool and fully-fledged hardware implementation expected in the next year or two of development. And Stedin, a distribution system operator in the Netherlands and EWF affiliate, is starting to pursue a blockchain-based D3A-like project with what it calls the Layered Energy System concept.

While these are all promising developments, much remains to be done before the D3A, or blockchain more generally, achieves any kind of true commercial scale in the energy sector.

“We still need to build out further functionality and capability of the Energy Web chain, which is currently available as a testnet, and then accelerate its adoption”, says Ewald Hesse, vice chair of EWF and co-founder of blockchain developer Grid Singularity.

“Then when it comes to the D3A, we also have the pure technological challenges of real-time electricity grid balancing and issues around regulatory acceptance to contend with.”

Even so, as GTM declared earlier this year, “one thing is certain: blockchain is here to stay“.

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Global trade is broken. Here are five ways to rebuild it

Politics still matter in the US but not in Europe

Why Europe is more competitive than the US

Here are 5 security challenges Nigeria’s leader must tackle

4 reasons why women should lead the G7 agenda in 2018

To build cities fit for the future, we need to think differently

COVID-19: A time screaming for positivity

NASA has released new photos of the Apollo 11 moon landing

In West Africa, UN Security Council visits Côte d’Ivoire and Guinea-Bissau

EU leaders slammed on anti-tax evasion inaction and expensive energy

The world’s economy is only 9% circular. We must be bolder about saving resources

Tanzania’s Dual Burden

EU agricultural production no more a self-sufficiency anchor

Children are so hungry in one British town they are eating from bins

Macron’s Presidency: what the young generation’s expectations are

WEF Davos 2016 LIVE: “If we do not do properly the Paris agreement, then all 16 remaining goals will be undermined”, UN Secretary General Ban Ki-moon cautions from Davos

African continent ‘an example of solidarity’ towards migrants and refugees: UN chief

More hiring freedom can reduce teacher shortages in disadvantaged areas

India’s strategy in space is changing. Here’s why

4 ways blockchain will transform the mining and metals industry

MEPs reject making EU regional funding dependent on economic targets

Mozambique pledging conference hopes to soften devastating blow of back-to-back cyclones

Why responsible consumption is everyone’s business

Yemen war: UN-backed talks to silence the guns due to begin in Stockholm

Suffering of thousands of war-affected Syrian children ‘unprecedented and unacceptable’

How COVID-19 has changed what we search for online

Fighting against the Public Health System dismantling means guaranteeing assistance to all

VW diesel scandal and climate change: can increased independent car checks lead to cleaner mobility?

Italy’s Letta: A European Banking Union soon or Eurozone collapses

nCoV: An Emerging Respiratory Infection

Infringement – Commission takes Italy to Court for its incomplete regime of access to genetic resources

UNICEF urges governments to repatriate thousands of foreign children stranded in northeast Syria

The EU responds to US challenges by fining Apple with €13 billion

COVID-19 shows we need a broader definition of safe mobility

MEPs vote for upgrade to rail passenger rights

UN agencies call for action to bolster rights of Europe’s stateless children

LEAGUE OF YOUNG VOTERS LAUNCHES TOOL FOR YOUNG PEOPLE TO COMPARE POLITICAL PARTIES AHEAD OF EU ELECTIONS

Chart of the Day: These are the world’s most innovative economies

5G in Russia: a local and global view on the way forward, in association with The European Sting

Samsung’s profits fall as cheaper smartphones gain market share

Do we need a new Marshall Plan to rebuild Europe after COVID-19?

How the powerful science of behaviour change can make us healthier

Italy solves the enigma of growth with fiscal consolidation: The Banking Union

Biblioburro: The amazing donkey libraries of Colombia

State aid: Commission approves Danish public financing of Fehmarn Belt fixed rail-road link

China and UK relations post Brexit as EU addresses Chinese takeovers

‘Worst devastation I have seen,’ says UN refugee envoy Angelina Jolie, as she visits West Mosul

Seize the opportunities of digital technology to improve well-being but also address the risks

The Prime Minister of Spain on climate change, taxes and more

Portugal: Budget MEPs back €4.66 m in job-search aid for 730 redundant workers

UN General Assembly urges greater protection for Palestinians, deplores Israel’s ‘excessive’ use of force

Countries must make teaching profession more financially and intellectually attractive

The European Union’s Balkan Double Standard

Cyprus Parliament says no to blackmail

Financial abuse of elderly ‘rampant, but invisible’, says UN expert

Increased levels of carbon dioxide could reduce brainpower, study finds

Supply chains have been upended. Here’s how to make them more resilient

The US may be “open” to reviving TTIP, while the EU designs the future of trade with China

Parliament wants to suspend EU accession negotiations with Turkey

UN chief commends African Union on adoption of institutional reforms

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s