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“.

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

The EU sides with China against the US; but has Germany capitulated to America?

Voice tech and the question of trust

As north-west Syria violence reaches ‘horrifying’ new level, UN relief chief says ceasefire is only option

More women and girls needed in the sciences to solve world’s biggest challenges

Jellyfish are taking over the world – and climate change could be to blame

International Day of the Midwife: 5 things you should know

Families deserve answers when loved ones go missing in conflict: Security Council adopts historic resolution

FROM THE FIELD: Faces and Voices of Conflict

How COVID-19 is throttling vital migration flows

EU deal on electricity market rules to benefit both consumers and environment

Number of MEPs to be reduced after EU elections in 2019

As Syria conflict enters ninth year, humanitarian crisis ‘far from over’, Security Council hears

MEPs condemn attacks on civilians, including children, in Yemen

German political spillovers: ECB’s Draghi resists first attacks by AfD

To build a circular economy, we need to put recycling in the bin

If on a summer’s night: is UK businesses’ “new deal” the only key to the “best of all worlds”?

UNICEF must triple budget to combat Ebola outbreak in DR Congo; complex crisis impacting unprecedented number of children

The United States divorce rate is dropping, thanks to millennials

COVID-19: Boosting aid for farmers from the EU rural development fund

Commission imposes a fine of €561 million on Microsoft

UN unveils global influenza strategy to prevent ‘real’ threat of pandemic

Access to healthcare is not enough – high quality care has to be the target

This man swam under the East Antarctic ice sheet to highlight the impact of climate change

‘Preserve, revitalize and promote’ indigenous languages, or lose a ‘wealth of traditional knowledge’, UN chief says

How emerging markets will shape Africa in 2020

Asylum seekers in Sri Lanka fear for their safety, in wake of Easter Sunday terror attacks

A geared turbofan at Pratt & Whitney's production hub in West Palm Beach (copyright: Pratt & Whitney - a UTC Company- 2018; Source: Pratt & Whitney's website, media center)

The EU Commission approves UTC’s acquisition of Rockwell Collins under conditions

Dangerous Trumpism in the Middle East with an anti-European edge

Bid to raise $5.5 billion for millions of Syrians and their host communities

MWC 2016 LIVE: Stripe gives payments leg-up to startups in emerging markets

EU economy: Between recession and indiscernible growth

Thursday’s Daily Brief: Climate crisis and food risks, fresh violence threat for millions of Syrians, calls for calm in Kashmir

In Marrakech, UN chief urges world leaders to ‘breathe life’ into historic global migration pact

UN chief welcomes event reuniting families on the Korean Peninsula

Cross-roads

China is adding a London-sized electric bus fleet every five weeks

UN appeals for international support as flood waters rise in wake of second Mozambique cyclone

Mental health in the context of a pandemic: social distance

MEPs cap prices of calls within EU and approve emergency alert system

Digitalization is changing banking – These 3 trends will help shape its future

Why collective action is the key to saving our forests

Libya detention centre airstrike could amount to a war crime says UN, as Guterres calls for independent investigation

Banks suffocate the real economy by denying loans

How the Irish people were robbed by banks, the Commission and their own government

The financial crisis always prefers the south of Eurozone

The most unlikely innovators are changing ICT for development – it’s time we took notice

Millions of Afghans have ‘voted not just for a president, but also for democracy’, UN Assembly told

Mali: UN chief calls for calm as clashes leave over 20 dead in Mopti

A young doctor from Glasgow reports: in the UK refugees are left to rot

Britain offers more money for an orderly Brexit but the Irish question resurges

“BRI cooperation is entering a new stage: we need a new and more constructive approach rather than waste time on suspicion”, China’s Ambassador to EU Zhang Ming underlines live from European Business Summit 2019 in Brussels

Mergers: Commission approves acquisition of L3 Technologies by Harris Corporation, subject to conditions

State aid: Commission approves French scheme deferring payment by airlines of certain taxes to mitigate economic impact of coronavirus outbreak

The EU checks the multinationals for tax fraud but Britain may sail out of the EU via Panama

COP21 Breaking News_04 December: Commitments Made to Reduce Black Carbon, Methane and HFCs

EU Parliament: Follow the fraudulent money and confiscate it

MEPs back plans to halt spread of drug resistance from animals to humans

Antitrust: Commission fines Google €1.49 billion for abusive practices in online advertising

The Fourth Industrial Revolution is changing how we grow, buy and choose what we eat

Why India can show us how to achieve growth with purpose

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