Energy companies join forces with Rocky Mountain Institute and Grid Singularity to launch global blockchain initiative for energy
Basalt, Colorado/Vienna, Austria (May 8, 2017) – Centrica plc, Elia, Engie, Royal Dutch Shell plc, Sempra Energy, SP Group, Statoil ASA, Stedin, TWL (Technical Works Ludwigshafen AG), and Tokyo Electric Power Co (Tepco) have joined forces to support the Energy Web Foundation (EWF), a non-profit organization whose mission is to accelerate the commercial deployment of blockchain technology in the energy sector. Thanks to their support, EWF has secured the first round of funding amounting to $2.5 million.
EWF is a partnership between Rocky Mountain Institute, an independent, U.S.-based nonprofit organization focused on driving the efficient and restorative use of resources, and Grid Singularity, a blockchain technology developer specializing in energy sector applications.
Blockchain technology reduces transaction costs by keeping a single logical copy of transaction records—avoiding the need for reconciliation and settlement. Because of its unique attributes, blockchain technology has the potential to play a significant and potentially game-changing role in the energy sector. On the incremental side, blockchain technology can be used to reduce the cost of utility bills or the need for working capital in wholesale market gas or electricity transactions. On the game-changing side, blockchain technology can allow millions of energy devices (HVAC systems, water heaters, electric vehicles, batteries, solar PV installations) to transact with each other at the distribution edge while providing support to utilities and grid operators to integrate more utility-scale variable renewable energy capacity at much lower cost.
“The main challenge of the electricity sector in the 21st Century is to integrate more renewable energy into the grid in a cost-effective fashion in a context of largely flat or diminishing demand. The only way we know how to do this is by automating the demand side—by allowing many more participants in the grid. That means automation at the distribution edge, and integration of this automation with wholesale markets,” Hervé Touati, a managing director at RMI and president of EWF, said. “We are excited by the potential of blockchain technology as an enabler to realize that vision. Blockchain will not be the only building block of the 21st Century grid, but it will most likely be a key building block. It also provides much higher levels of cybersecurity essentially for free—which addresses, as a by-product, one of the key concerns of utility executives when it comes to distributed energy resources.”
As a cofounder of EWF, Grid Singularity is leading the development of an open-source, energy-specific blockchain infrastructure that will be maintained by EWF and supporting affiliates. Grid Singularity, together with its partner Parity Technologies, will bring the most advanced blockchain technology, addressing the limitations in terms of speed and transaction costs of the currently available blockchains, and enabling features that are focused on supporting energy-specific applications.
“The current test-network ‘Kovan,’ which is a proof-of-concept for the new consensus algorithm, has the ability to perform up to 1,000 transactions per second (tps) and is already used by many blockchain start-ups. By embedding further state channel technology, we intend for our architecture to facilitate scaling to 1 million tps over the next several years,” Ewald Hesse, chief executive of Grid Singularity and vice-president of EWF, said. “With the ‘Polkadot’ design conceived by Parity Technologies, we are also introducing the concept of interoperability among multiple blockchain architectures, which should free users from technology lock-in.”
In parallel with the development of an open-source IT infrastructure, EWF also will work on analyzing use cases and organizing task forces to push the most promising use cases into proof of concepts and commercial applications, while incubating an ecosystem of application developers, and cooperating with regulators and standardization bodies to facilitate deployment. EWF is actively soliciting collaboration with other technology providers eager to support the open-source approach of eliminating energy market entry barriers.
More information on EWF can be found at: www.energyweb.org.
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