IBM has created a blockchain consortium with three of Europe’s electricity grid operators to help smooth the transition to renewable sources of energy.
It’s an important step in the direction of decentralizing and democratizing the way power is consumed, which is essential if nations are to reach 2050 carbon-reduction goals.
The new Equigy platform is backed by TenneT, a grid provider covering Netherlands and part of Germany; Terna covering Italy; and Swissgrid covering Switzerland. Blockchain tech is employed as an accounting system so that consumers charging their electric vehicles (EV) or using home batteries can interact with the three transmission system operators (TSOs).
Stepping back, one of the challenges with renewable energy sources like wind or solar is that power production is no longer as predictable as it is with coal- or gas-fired plants, which can be ramped up at will.
The problem of green energy fluctuation can be addressed by consumers, many of whom are steadily shifting their transportation needs onto the electricity grid (oil is becoming a stranded asset in front of our very eyes). By opting to temporarily stop charging an EV, for instance, the efforts of individual users aggregated together can spare the grid megawatts of power.
A blockchain, in this case the Linux-affiliated Hyperledger Fabric protocol favored by Big Blue, operates as a trusted backbone to share charging data between consumers, aggregators and TSOs, which Equigy officials say will help create a unified system across borders.
“We can make the cause of the problem, which are all these renewable assets and people using EVs, also the solution,” said Leo Dijkstra of IBM’s Energy, Environment & Utilities unit. “If they can scale together then it’s possible to participate in the market for flexible power.”
For example, 100 EVs charging at 10 kilowatts equals a megawatt of flexible power, which is typically the smallest increment traded on flexible power markets, said Dijkstra. By aggregating the steadily growing number of EVs on the road, it becomes possible to equal the impact of big players in that market.
“The flexible power market is typically where large companies play, either with power plants or large industrial installations, not somewhere you and I can participate with our own assets,” said Dijkstra. “But we saw the blockchain as a means to make the system trusted and democratized, so that domestic appliances can participate and be trusted by the TSO.”
Irene Adamski, co-chair of the energy working group at the International Association of Trusted Blockchain Applications (INATBA), said the Equigy initiative showed lots of “promising signs,” and that something like this proposal has been brewing in the energy space for the past three years.
Having powerhouses such as TenneT, Swissgrid and Terna is sensible when seeking to solve energy transition challenges for all of Europe, said Adamski, formerly of the Energy Web Foundation and currently a blockchain adviser to the Organization for Economic Co-operation and Development (OECD).
“Should the Equigy pilot project succeed, the heavily integrated area of Netherlands-Germany-Switzerland-Italy is an excellent jump-off point to expand across the continent,” she said. “The possible addition of Denmark, one of the countries with the largest amount of renewable energy in the mix, would make the entire thing rock solid.”
Electric-car makers are especially interested, said IBM’s Dijkstra, because consumers, by participating in such schemes, could see the total cost of EV ownership reduced.
Francisco Carranza, managing director of Nissan Energy, said he was pleased to see this platform rapidly scaling across Europe through the TSO collaboration of TenneT, Swissgrid and Terna.
“Most importantly, the system ensures that the electric vehicle owners are in full control and manage their energy storage or utilization. This enables balance of the grid efficiently and in the most profitable way,” he said in a statement.
The Equigy pilot, which is the fruit of a number of proofs-of-concept, will run until the end of the year.
Dijkstra explained that since TSOs are responsible for facilitating regulated processes, the consortium is initiated by Terna, Swissgrid and TenneT, whereas other firms such as carmakers cooperate as project partners.
Not so fast
The big challenge with all this is getting pioneering technology to integrate with legacy systems and architecture, as opposed to merely showcasing standalone proofs-of-concept, said Adamski.
In her role as co-chair of INATBA’s energy group, Adamski says incremental changes via sandboxes and blockchain projects are better suited to addressing the problem than a single, heavily funded attempt at an overhaul.
“From the DLT ecosystem perspective, it will also be interesting to see what technological approach they [Equigy] intend to take and which code base they plan to use,” she said.
Another essential piece of the puzzle is getting regulators to collaborate in the decentralization of the existing system.
“A lot of the proposed market roles, data exchange mechanisms and liability questions are so new that the existing legal frameworks do not cover them sufficiently,” Adamski said.
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