This week SolarPlaza has launched a live monitor of all the European blockchain projects in the energy sector. Under the name Blockchain2Energy Europe Solarplaza is hosting its third conference focused on the practical and current-day applications of blockchain in the energy sector. It’s scheduled for the 13th of February in Amsterdam.
An interactive map helps provide an overview of all energy project in Europe that embrace the somewhat controversial blockchain technology. From the map introduction:
In the wake of cryptocurrencies, interest in blockchain technology peaked in late 2017, spreading like wildfire across newspapers and websites for weeks, which all reported on its seemingly unlimited potential to disrupt all industries, including the energy sector. Blockchain start-ups, pilot projects and ICOs (initial coin offerings) popped up on an almost daily basis. In the energy sector alone, we identified over 150 projects using blockchain.
But, just like the rise of interest in blockchain followed the curves of cryptocurrencies, so did the fall. At the time of writing, the total market cap of cryptocurrencies is just 16% of what it was exactly twelve months earlier. Similarly, Google Trends shows that the interest in blockchain as a search query is just 15% of what it was one year ago.
However, blockchain might actually still hold the most promising features to truly enable the energy transition. Since this can be a rather complex topic to wrap your head around, I reached out to Thomas Boersma, project manager at Solarplaza, to give me a little heads up on all this. Like, how this all relates to everyday energy supply:
Well it’s not so much energy supply based on blockchain, but more a digital tool to enable some incremental improvements in the energy sector (I don’t think it will disrupt the energy sector as much as some think, which I explain in this blog post). But blockchain is basically nothing more than a ledger with some improved features, enhancing trust and cybersecurity and allowing automation of certain processes through smart contracts. Especially for tracking (through e.g. supply chains) or transactions, this comes in handy. So the most obvious use case is peer-to-peer energy trading (which is not possible in most countries due to regulation). Here blockchain functions as the ledger which keeps track of the transactions of kWhs and valuta. The upside of blockchain here is that there is “no need for a middleman”, which in this case would be the utility, you just connect all smart meters and devices to the blockchain, which then records everything in a safe way. Same counts for for example EV charging. If you zoom out a bit and allow for multiple parties to trade energy, blockchain can be the base layer for (local) energy markets, e.g. used to trade flexibility. Another nice use case is Renewable Energy Certificates, preventing double spending and allowing trades of these over the blockchain. As soon as a kWh is produced, it gets recorded on the blockchain, and gets so to say it’s own identity. This makes this kWh traceable throughout its lifetime, preventing double spending.
That seems pretty straight forward. However, I am still a bit in the dark on how utilities will embrace this. It seems to me it’s more lucrative for them to keep sending me a bill that is hopeless to understand that I just pay with a deep sigh. I have solar panels, but even if I want to sell a few kWh to my neighbor, the owner of the cables in the streets can still rip me of. So, I asked Thomas to elaborate:
I’m also not an advocate of blockchain and quite skeptic myself. I think that for utilities the potential of blockchain isn’t so much in consumer billing but more in trading on the capacity market. E.g. EDF trialed trading over Electrons blockchain platform. On the old legacy system this takes about 5 days, while the new system needed a few milliseconds. These kind of efficiency gains will in the end be beneficial on your bill (I hope). And the owner of the cables in the street (often (semi)state-owned DSOs (Distribution System Operators) only have one task and that is keeping the grid reliable. If they can prevent that they need to put more cables in the ground by allowing you to trade with your neighbor, that’s probably the cheapest option for them. In the Netherlands, Stedin is already doing a pilot on this (in Hoog Dalem). The problem isn’t that big now, but if in one street five people win the lottery and buy a Tesla, they are in trouble. So if EVs get wider adopted and they don’t prepare for this by these kinds of pilots, they will have to put more cables in the ground, and that is almost always the most expensive option (and in the end we pay for it).
OK, got it. So, check out Blockchain2Energy if you want to know more about blockchain energy applications in action.