Energy Web Foundation Launches Pioneering Blockchain to Accelerate a Low-Carbon, Customer-centric Energy System
Earlier this week, Rocky Mountain Institute (RMI) celebrated the public release of the Poseidon Principles, a pioneering agreement to reduce the carbon emissions of the global maritime shipping sector some 18 months in the making, and the first global agreement among financial institutions to align investments with Paris commitments. Today we celebrate a similarly momentous occasion that has been in development for more than two years: the launch of the Energy Web (EW) Chain, the energy sector’s first open-source, tailor-made blockchain.
In early 2017, RMI partnered with European blockchain developer Grid Singularity to cofound the Energy Web Foundation (EWF). Since then, EWF has unwaveringly focused on two major outcomes: a) build a blockchain platform specifically tailored to the performance and regulatory requirements of the energy sector, and b) foster a global ecosystem of utilities, grid operators, startups, regulators and other energy companies that would establish the network and serve as its early adopters.
Why? Because we believe blockchain technology is a crucial enabler for accelerating the low-carbon, distributed electricity future RMI has been working toward since 1982.
How Blockchain Unlocks Energy Sector Value
Perhaps most-widely known as the technology underlying cryptocurrencies such as Bitcoin, blockchain is both a decentralized database and a decentralized computer. Its data management algorithms are extremely secure and difficult to cheat. Through programs called “smart contracts,” it has the ability to automate both physical and financial settlement. And it can be designed to operate cheaply, decreasing the friction in markets with different-sized participants. Using these attributes, we envision blockchain-based approaches to improve data integrity and transparency, streamline and automate back-office processes, reduce the financing and operating costs of distributed energy resources, and foster greater market access, especially for smaller players.
The Energy Web Chain, the energy sector’s first open-source, tailor-made blockchain, is a crucial enabler for accelerating a low-carbon, distributed electricity future.Tweet
Even before today’s public launch of the Energy Web Chain, we witnessed EWF’s test networks gain significant traction for use cases such as renewable energy certificate markets, decentralized electric vehicle charging, and financial settlement of demand response and grid flexibility services. From European grid operators such as Stedin and Elia, to Spanish utilities Acciona and Iberdrola, to Asian utilities like SP Group in Singapore, the EWF blockchain quickly proved much more than a technology novelty.
Breaking New Ground in the Electricity System’s Digitalization
After launching in early 2017 with roughly a dozen affiliates, the EWF community has grown to now more than 100 affiliates, making it the world’s largest energy blockchain ecosystem. The Energy Web Chain, now live, is noteworthy for several additional reasons:
- Public, open-source: The EW Chain is a public blockchain, designed to foster innovation and interoperability while encouraging adoption.
- Fast, efficient, scalable: Thanks to a blockchain approach known as proof-of-authority, the enterprise-grade EW Chain is energy-efficient and highly scalable, two requisite qualities for an energy-sector blockchain.
- Corporate validators: Unique among blockchains, the EW Chain’s validator nodes that maintain copies of the blockchain database and agree on adding new blocks of transactions to the chain are respected energy companies (rather than anonymous computer “miners” common in other blockchains), a key design decision that should help the EW Chain gain favor among regulators and boost energy-sector confidence in the technology.
Small Has Never Been More Profitable
Electricity grids around the world are undergoing digitalization. They are also experiencing unprecedented decarbonization and decentralization. Low-carbon distributed energy resources such as solar PV, behind-the-meter battery energy storage, smart thermostats, electric vehicles, and a long list of other customer-centric technologies are fundamentally transforming electricity’s future. They are cheaper than ever before and are being adopted globally in record numbers. In other words, to reference an earlier work by our colleague, RMI founder and chief scientist, Amory Lovins, “Small has never been more profitable.”
Blockchain, itself a decentralized technology well-suited to the future energy system, is a better alternative than trying to adapt traditional centralized IT approaches to a more-and-more digitalized and decentralized energy system.
A History of Launching Sector-Specific Solutions
RMI has a proud history of launching sector-specific solutions where the market has demanded. Just earlier this year, RMI’s Business Renewables Center—which had already established itself as a driving force in the corporate renewables procurement market—spun out with nonprofit partners to officially form the Renewable Energy Buyers Alliance. Similarly, RMI and partners launched the Global Cooling Prize, an innovation competition to develop a residential cooling solution that wouldn’t also warm the planet.
Now, Energy Web Foundation joins that family, with today’s launch of the Energy Web Chain.
Scaling Global Impact
For several years, blockchain has made bold promises to the energy sector. Now, that promise takes a giant step closer to becoming reality. In the weeks ahead, we expect to see the first commercial applications migrate from the Energy Web test networks to the production Energy Web Chain. As they do, we will get a glimpse of just how a customer-centric, decentralized network solution comes into being.
It is an exciting moment of genesis that portends even greater things ahead.