What are the possibilities for DLTs like Blockchain, Tangle and other related technologies in the electric mobility infrastructure?
Blockchain technology (distributed ledger technology) is hyped nowadays. Every industry is looking at it trying to find out how it can help them streamline their processes. Sometimes the goal is to just use technology because everyone talks about it, but without any real benefit. However, due to the nature of distributed ledger technology a lot of processes in this world can be changed radically, for the better. The same goes for electric mobility, and the infrastructure supporting it.
About distributed ledger technology
A distributed ledger technology (DLT) according to Wikipedia is: A distributed ledger (also called shared ledger) is a consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, or institutions. There is no central administrator or centralised data storage.
The technology behind the bitcoin, blockchain, was invented by a person or group of people known by the pseudonym; Satoshi Nakamoto. The technology allows information to be distributed amongst people, but ensures that it cannot be manipulated. This is also part of the cryptocurrency, Bitcoin. You can only spend bitcoin if you own it, and you cannot create new bitcoins out of thin air. The whole history of transactions is stored, of every single bitcoin. This creates trust, without the need for a 3rd party.
Since the start of bitcoin in 2008, the technology has grown ever since. The first use case was as a cryptocurrency, but soon people realized this technology could be used for other things to; identity management, immutable storage of data (i.e. odometer/tachograph), supply chain tracking and many other use cases.
The benefits of DLT in short can be: efficiency, transparency, enabling new (distributed) functionalities and no need for a 3rd party.
The difference between blockchain, the tangle, DLT
Before we dive into the use cases, we first want to explain the difference between Blockchain and a new technology, the Tangle.
The Tangle and Blockchain are both implementations of DLTs. While currently most cryptocurrencies are based on Blockchain, one newcomer has joined the scene: The Tangle, the distributed network behind the IOTA cryptocurrency. The Tangle does not require a chain of blocks, but it is a directed acyclic graph (DAG). Video about and explaining DAG.
Visual representation of a directed acyclic graph
Blockchains (such as Bitcoin, Ethereum) mostly rely on consensus via proof of work (done by miners) by solving a cryptographic puzzle to add new blocks to the chain, and returning a reward for the miners. New blocks are found at an approximated time, this means that the confirmation time of transactions is predefined too (depending on the fee you pay nowadays), the blocksize thus the amount of transactions per block is limited. The IOTA Tangle is radically different.
How? Let’s take a look at IOTA, an implementation of the DAG Tangle technology. With IOTA, the one who creates a transaction, needs to verify two previous transactions in the network. Adding the transactions to the network requires some small Proof of Work by the creator of the transaction itself. Since the Tangle does not rely on blocks, the amount of transactions per second can be much higher (thousands per second). While Bitcoin and Ethereum are looking for solution to be more scalable, IOTA is scalable by design. The more transactions created, the more transactions are verified and confirmed with IOTA. Creating a transaction does not require any fee, so sending value or data via the Tangle is free of charge. This enables a whole lot of new use cases, which were too costly with using Ethereum and other blockchains.
DLTs and the electric mobility infrastructure
The electric mobility infrastructure can benefit from these new technologies. In electric mobility we have to deal with (but are not limited to) the grid, the energy supplier and payments for the energy consumed by the customer, all according to predefined processes, information exchange interfaces and connected (mostly) to a central hub.
We need scalable solutions, because it is predicted that in the near future a lot of electric cars will hit the streets, and they all need to be charged. This requires a lot of communication between different devices, and might even require to do a lot of micro transactions between electric cars itself. This rapid growth will probably also stress the electricity grid, because we will add a lot more simultaneous demand to it. At ElaadNL we’re looking at how to balance the demand and supply in such a way that we use the grid as efficiently as possible, use as much sustainable energy as possible when it’s available, and still satisfy the customer.
The use of DLTs can be one of the solutions to bring this all together. A cryptocurrency can be used for payments, while the technology behind the cryptocurrency can also be used for immutable storage (and non-repudiation) like measurement data of the charge station or data transfers. This all requires a lot of transactions, and real scalability.
IOTA, based on Tangle technology, could be one of the technologies which enables us to do this. In current charging infrastructure we mostly just deliver energy towards the car, but we can also think of discharging a car for a short period (V2G). Automatic payments (plug&charge) is a promising use case. We can also think about use cases regarding the local exchange of energy from distributed generation to local (flexible) loads. These include EVs, and/or the exchange of capacity (within a specific zone (behind a transformer) between connected parties and the DSO. This requires micro transactions and this also requires us to store data in a secure and immutable way. This should be as fast as possible, and of course, with no fees since the micro transactions could be transactions of only a few cents.
ElaadNL is conducting pilots and proof of concepts
ElaadNL, together with Enexis, is currently involved in two projects to incorporate distributed ledger technology. One of them is Share&Charge (“Oslo2Rome” initiative”) from Motionwerk (Innogy Innovation hub Spinout). With Share&Charge we are creating an ecosystem based on Ethereum (blockchain) around e-mobility, but not limited to e-mobility. We foresee it as a platform on which added value can be created, like adding parking spots or smart charging solutions. The platform will be as decentralized as possible, but would still require some foundation to manage it. Partners from all over Europe are involved in this project. This project will eventually turn into a non-profit foundation, part of OMOS.
Another proof of concept is creating a charge station with IOTA technology. Usually a charge station is connected via OCPP (Open Charge Point Protocol) to a backend server. In the prototype, we’re only connecting the charge station to the IOTA Tangle. All payments are done via IOTA, but also all data transfer for storing measurement data or user interaction is done via IOTA. Since these transfers are without any fees, this allows for completely new use cases. This proof of concept will only require the IOTA technology, and no need for any centralised platform to be connected to. Thus, it will allow any party to do business using the technology. The prototype will show us the capabilities of IOTA, and the challenges we still face.
Harm van den Brink (LinkedIn) is leading these innovations at ElaadNL: “These technologies can radically change the world. At ElaadNL we’re following and actively participating in these technologies. The start of ElaadNL, back in 2009, was the same. There were no charge stations in The Netherlands, and not that many electric vehicles. We placed over 3.000 charge points in a few years to super charge the adoptions of electric vehicles and assess the impact on the electricity grid. After that we switched to smart charging, to help balance the grid. With this approach we can use sustainable energy while still satisfying the customer. At ElaadNL we keep researching and innovating with new technologies. Now we see that DLTs can have real impact on the information flow and security of the grid, because of the possibilities of decentral balancing. Especially in e-mobility we will see these decentralised developments come together before these aspects influence the other parts of the electricity system, providing a perfect test-base for the new functionalities and the technical enablers. We jump in, and start building. That’s what we do at ElaadNL, we bring the theory to practice.”