Last week saw team Verv head to Berlin for Event Horizon, one of the biggest conferences of the year focusing on blockchain in the energy sector. As members of the Energy Web Foundation, we also attended the EWF forum which brought together all of the affiliates, from start-ups to large corporations, with a vested interest in transitioning to a smarter energy system. This facilitated collaborative conversation in a workshop-type environment in order for us to pool our thoughts and knowledge to decipher next steps in accelerating this transition, with the climate crisis being a fundamental driver.
Having attended last year, it was interesting to observe how the market and conversation had moved on over the space of 12 months and determine what is driving the industry forward, as well as holding it back. It’s safe to say that this year saw the sector cutting through the hype of blockchain and instead focusing on tackling the challenges and realities of real world implementation, and honing in on the many very real and transformative opportunities. To sum it up, less talking and more doing.
Here are 5 key takeaways, discussions and highlights from the event:
- The energy sector is proving that it’s pioneering blockchain development
There was a huge amount of excitement around the launch of the Energy Web Chain at the conference as the Energy Web Foundation launched its public, open-source blockchain custom-built for the energy sector. This is an important milestone that demonstrates that the energy sector is taking a leading role in blockchain development and it was great to see the chain in action — with validator nodes hosted by 10 companies within its affiliate ecosystem including large corporates. It’s interesting to note that the recently announced Facebook Libra system operates similarly to the Energy Web Chain with an ecosystem of central validators. Key use-cases for the Energy Web Chain include peer-to-peer energy trading, demand response, and tracking certified renewable energy kWh and its associated carbon offsets on one platform across geographies to avoid challenges like double counting.
There is still a long way to go though and GDPR was an important topic that was discussed in relation to the chain, particularly with regard to worldwide interoperability where different laws exist (US vs Europe for example). Data protection is of utmost importance and ensuring security is a priority for the chain and all associated Dapps.
2. We’re starting to look at bringing separate blockchains together using bridges or para-chains
In addition to the idea that there should be one fit-for-everything blockchain for energy, people in the energy space are also looking at various ways to bring together separate blockchains. It is very interesting to see how things are moving towards this multiverse of blockchains. Some people are talking about running off-chain bridge validation servers alongside the Energy Web validator nodes to help create bridges between let’s say the Ethereum Mainnet and Energy Web in order to move stable coins from one blockchain to another and back. The Energy Web Foundation itself is talking about creating para-chains and therefore growing the Polkadot network (there are a few small ones and a few big ones already — you can see the telemetry here). Finally, others are using something more complex like Zero Knowledge Proof’s next generation cryptography to prove holdings and transfers of stable coins, for example, without revealing the information itself which seems optimal for enterprise privacy and interoperability as described here.
3. Legislation is still the biggest barrier that we’re facing and one that we must tackle collectively
As many of you may know, Verv is lucky enough to be part Ofgem’s (the UK regulator) sandbox which is allowing us to bring to life our peer-to-peer energy trading platform at a community in London. Much like sandboxes often linked to fintech, this gives us regulatory flexibility in order to demonstrate the benefits of cutting-edge technology in a controlled environment.
From a global perspective, Ofgem’s sandbox approach is quite a unique one and it was interesting to speak to a number of companies from across the world who saw real value in this being replicated in other markets to provide regulators with tangible results that can assist in accelerating change. As we always say, it’s crucial now more than ever that regulation keeps pace with innovation. The challenge that we face is that regulation differs from country to country and even state to state but if we can rally together to put pressure on our respective market regulators and policy makers, and crucially provide indisputable evidence, we are likely to see a domino effect. With Greta Thunberg and the Extinction Rebellion behind us, people are listening and it’s our job to ride on that momentum to ensure we’re heard.
Recently we supported New Anglia Energy in raising the P379 Elexon Modification here in the UK. The modification enables consumers to buy and sell electricity from/to multiple providers through Meter Splitting. The outcome of this will be a very significant one for the future of peer-to-peer energy trading and it’s progress like this that reassures us that change is on the horizon.
4. Real-time energy data will open up new services across the sector that enable true optimisation
The real value of smart meters and the data that they can provide has been debated since the beginning of their roll-out. Smart meters certainly marked a step in the right direction from the point of view of digitalisation, helping customers to better understand their usage, and more accurate billing. Smart meters serve a basic purpose but something that was heavily discussed was the need for more granular data in order to create a market that’s truly smart, flexible and optimised. Real-time information and accurate forecasting models are priceless when it comes to optimisation and minimising wastage. And this spans from the user all the way up to the top of the energy system. It was interesting to see a shift in thinking from the likes of Transmission and Distribution System Operators who are starting to look beyond smart meters and are excited by the value that data like Verv can provide to streamline how they operate, as well as provide improved flexibility services and opportunities that consumers can be a part of and monetise.
5. The power of community energy initiatives are becoming more recognised throughout the industry
As one of the evangelists for peer-to-peer energy trading, it’s brilliant to see the use-case becoming more recognised and understood in the industry as a solution that provides many benefits that contribute to a digitalised and low carbon energy system. Reduced energy bills and carbon emissions, along with incentivisation for the uptake of renewables, future self sufficiency and help with grid balancing are just a few of the advantages. That’s why Energy Web Foundation have created D3A, a platform with which stakeholders in the electricity sector can investigate the benefits of transactive energy platforms through models and simulations.
We believe that peer-to-peer energy trading will play a leading role in optimising the use of distributed renewable assets, and is a service that can be replicated across different markets and environments. In the developing world, microgrids have the potential to bring self-contained electricity supply to remote areas where connection to a centralised grid isn’t possible. This is a hugely powerful and potentially transformative solution for off-grid areas.