Power Update #13—May 2019
Dear Electrify Tribe,
The last several weeks were packed with activities for making new international connections — we were invited to participate in two energy missions by EnterpriseSG, the Singapore government’s trade agency. The first trip was to Australia where we visited government agencies and energy companies in Sydney and Adelaide. We left with a much greater understanding of the Australian energy industry. With the support of EnterpriseSG, we have started discussions to explore how we can process Synergy P2P transaction using data from the National Energy Market (NEM), with a local retail partner. If all goes well with the parsing of NEM data, we may be able to create an opportunity to execute Synergy down under!
The second trip was to one of the largest energy conferences in Europe, at the Smarter E conference in Munich. There, we facilitated a number of requests for discussions with different organisations ranging from VPP technology startups to utility companies to solution and system integrators. There was a great deal of interest in what we were trying to achieve with Synergy and we will be following up with one of the utility companies from the south of Germany to discuss further about opportunities.
Synergy
This last month was also very significant for Synergy as we finished off another milestone in the matching algorithm for the platform. This upgrade allow for a balancing function to the matches that had some other P2P trials stumped. During our meeting with the Electricity Generating Authority of Thailand (EGAT) they revealed their own P2P trials ran into hiccups because of energy imbalances between the peers. We shared our own solution with them on how we achieved a high level of matching efficiency and they were sufficiently impressed with our solution to want to discuss how we might scope a possible pilot in Thailand in the near future.
We have been demonstrating Synergy’s core platform functions to a number of utility companies in APAC and have received some very positive responses; a few have expressed interest to carry out pilot projects with us and we are currently pursuing these opportunities. However, working with these partners comes with challenges and we’ll try to share as much as possible with the community without contravening confidentiality requirements of our partners. To this end, we have agreed to make joint press releases for project announcements.
In this last month, we also narrowed down a local retailer partner in one of Singapore’s licensed generation companies to deploy the beta test for Synergy here. Still in late stages of discussion over operational integration with their ICT and billing systems, we will make the collaboration announcement together within the next two months.
For the rest of 2019, we expect to focus aggressively on our plans to carry out real-world energy trading in our rollout of Synergy Beta with the generator in Singapore. We will also devote some energy to a research collaboration with FREA-AIST, a Japanese national research institute on peer-to-peer energy trading in Fukushima.
Synergy Core
After a good 12 months of research, ideation, user testing and tech development, the core functionalities of the Synergy’s platform have been built. This includes a two-tiered matching and energy optimisation backend that takes into account real-time volatility in consumption, generation, fluctuating wholesale market prices, grid transmission and distribution costs, and existing retail electricity contracts. It also includes the ability to introduce various types of generation technology, customised renewable procurement requirements for larger corporates and various billing and settlement integration methods with traditional utilities.
We have also developed a user-interface for both prosumers and consumers that tracks energy production and consumption down to the half-hour level — which most power markets are traded in (Fig 1). The platform is also robust enough to drilldown to the individual trading partner as shown in the screenshots below (Fig 2).
Blockchain Development
As you can see from the above, P2P energy matching occurs on more than one level over every trading period many times a day. The Australian energy market, for instance, works on a 5-minute dispatch which would mean a huge number of matches being made every 5 minutes, for Synergy to function in that country. Given the high computational requirements, it is uneconomical to run Synergy entirely on-chain. We have designed the current architecture with the matching engine and databases off-chain, while we continue to build other settlement-related functions on-chain. This is the fastest path to bringing Synergy to the real world and allowed us to start engaging power companies, prosumers and consumers with the latest version of Synergy while the on-chain modules and other pilot-specific customisation works are under development. Every energy market’s rules for settlement are different, with different needs from different partners, and we expect different smart contracts to be written for each iteration of Synergy around the world.
We have completed the development of a number of smart contracts that will work alongside Synergy’s core code. This includes the Powerpod-data smart contract and the smart contracts for energy contracts. When the entire system is completed, several smart contracts will work in tandem with Synergy’s core to track contracts entered between prosumers and consumers, P2P settlement data, billing data and to execute payment and token transactions between the Prosumer’s deposit wallet and Electrify’s ‘current account’ wallet.
Token Usage
Many from community have been asking questions about when we will integrate the ELEC token into Synergy; rest assured, our position remains unchanged. The unfortunate reality is that the power companies we engage still perceive cryptocurrencies and digital tokens as ‘high risk’. These risks include the volatility of the major currencies, the perceived costs of interacting with public blockchains and financial regulatory concerns. While blockchain is not a new term to most of them, it remains a new technology within the utility industry and many of the decision-makers approach it with caution.
Our typical approach with most of the utility companies we engage is to first explain the benefits of Synergy followed by the usage of blockchain in the energy space. For the utility partners that are receptive to implementing blockchain into their processes, we need to clarify how they can integrate with it. This latter outcome, too, has its own challenges as the utility companies are often running decades-old legacy software that has been patched umpteen times for countless operational functions.
For the prospective utility partners who chose to not pilot the blockchain component of Synergy, we will expect to execute our token mechanism ‘behind the scenes’. We expect to purchase tokens and place a deposit on behalf of prosumers into an ERC20 wallet and charge our transaction fee upon each payment or transaction. This strikes a balance between bringing our innovations to the market and the realities of the power and utility industry, blockchain scalability and the progress of development on our part.
