Andy Li, Founder of Eloncity: Blockchain Can Solve the Problems of Promoting Clean Energy

Eloncity

On May 4th, the rotating panel moderator Ivan Jiang and deputy leader Hanyu Liu of 3 O’Clock Entrepreneurship Discussion Group invited Andy Li, founder of Eloncity and POMCube, to give a talk on the topic of “reconstructing the global electricity structure using blockchain technology.”

Guest introduction:

Andy Li, the founder of Eloncity and POMCube, was once the CTO of ChinaCache and a computing researcher at Alibaba Cloud. During Andy’s 12 years of experience working for Cisco in the US, Andy developed a profound knowledge of traffic engineering and has since conducted in-depth research on the issue of access network intelligence. In 2014, Andy founded POMCube, a company that focuses on the development of high-efficiency energy storage systems controlled by cloud computing. Later in 2018, Andy founded Eloncity which is dedicated to reconstructing the trillion-dollar global electricity market using blockchain technology. The resulting products have been put to practical use in the industry.

Below is a summary of the group discussion

Andy Li, founder of Eloncity and POMCube; formal Chief Technology Officer of ChinaCache; Computing Researcher of Alibaba cloud.

He uses the same concept from CDN/ECN to change the traditional form of the electricity distribution network. Also, Andy Li strongly promotes the usage of DC distribution networks in super-data centers to increase data center power efficiency. Thanks to universal recognition and the promotion of industry experts, the concept of “data center DC-ization” as advocated by Andy has become an industry trend. During Andy’s 12 years of experience working for Cisco in the US, Andy developed a profound knowledge of traffic engineering and has conducted in-depth research on the issue of access network intelligence, leading him to conclude that it is more efficient than the Backbone Network. In 2014 Andy founded POMCube, a company that focuses on the development of high-efficiency energy storage systems controlled by cloud computing. Eloncity was founded by Andy in 2018 and the company was dedicated to reconstructing the trillion-dollar global electricity market using blockchain technology so that humans might be able to use clean electricity in the near future as their primary energy source .

Hanyu Liu: The topic that Andy spoke about today is using blockchain to restructure the global electricity market. What sort of relationship is there between blockchain and electricity?

Andy Li: Blockchain is inextricably linked to clean energy. Blockchain can help solve the current deadlock that the government encounters when promoting clean energy. To some extent, using blockchain technology and the token economy is the only way to promote the broad use of clean energy. Unfortunately, many blockchain energy projects simply cannot solve the sore points of the market at a fundamental level. Those projects are just putting old content in a new packaging, and are trying to reinvent the wheel.

Hanyu Liu: What is the reasoning for having so many blockchain projects that focus on electricity trading?

Andy Li: If projects only change the trading system, then I don’t think they can change any actual issues. Electricity companies’ real issue is not the billing system, but, actually, the pricing system due to the distorted cost structure and also their mentality of not advancing with the times.

The prices that power companies are charging to consumers are getting higher and higher, causing financial pressure for the consumer. In reality, the trading system cannot solve any problems at all; it can only help make prices more market-oriented. It cannot address the fundamental conflict of the electricity cost structure in our modern era of distributed electricity generation.

Feng Wang: Is it because all of the industry solutions are focused on developing patents instead of creating an atmosphere full of excitement? In my opinion, a large number of blockchains projects are not legitimate, particularly in trendy industry and in white papers produced by large companies.

Andy Li: Yes, this winner-take-all strategy cannot change today’s status quo. Blockchain technology is our key component. We at Eloncity, hope to use this transparent and efficient mechanism to encourage investment in energy storage systems and solve the issue of cold start of energy storage systems. With today’s rapid development of distributed electricity generation, if we can solve the problem of all-weather electricity consumption and drastically reduce the cost of using distributed electric power generation, then we can make clean energy our primary energy source.

Hanyu Liu: What about encouraging investment in energy storage systems? Are current investment amounts insufficient? What is the major problem for the global electricity supply? Is there a shortage of supply or an oversupply?

Andy Liu: Improper timing results in an imbalanced supply and demand. The blockchain is the core of the trading system and each micro-grid has its own ledger. The blockchain trading system will synchronize with the artificial intelligence algorithm by matching the status of the distributed energy resources of the Internet of Things(IoT) and will use machine learning to discern a community’s electricity demand model. In addition, we will also increase our analysis of the impact of local electricity demand caused by regional events, weather, and local energy prices so that we can provide users with even more reasonable electricity trading prices. Our goal is to make the price of local all-weather electricity generation lower than the electricity supply price for the grid, so that we can utilize market efficiency to increase the usage of energy storage systems, and reduce the cost of local electricity consumption.

Ivan Jiang: We have the trading system, the micro-grid, and the personal ledger. So what constitutes as a micro-net?

Andy Li: From a physical standpoint, a household connected to a DC grid within one mile from the home can be considered a micro-grid.

Ivan Jiang: How can we understand the personal ledger? Concretely speaking, what is the basic design of ledgers between micro-grids?

Andy Li: Each micro-grid has one ledger, and the ledger between micro-grids is a totally separate ledger. It is a multi-layer structured blockchain.

Chun Jiang: It sounds like there is a bunch of Oracle, like regional events, weather, and local energy prices. Why don’t you need Oracle? Otherwise, it could be a centralized system, so why use blockchain?

Andy Li: These effects are changes in electricity demand. I think that blockchain doesn’t adequately represent decentralization, or you could say that there is a misunderstanding of the “decentralization” that I just mentioned — complete decentralization is more appropriate to use a perpetual distributed understanding. However, average users cannot absorb that much information. So we need to use artificial intelligence and use Oracle-produced calculations to come up with a suggested reference price.

Chun Jiang: Changes in demand will be directly reflected in trade, but for this external data, it is either Oracle, or it is a centralized price-matching mechanism. Do you mean you want to integrate the changes into a whole oracle, or want to make a centralized price-matching mechanism?

Andy Li: Again, the distributed price-matching mechanism is easier to understand. The price is matched using a decentralized system, and each micro-grid has a different environment. As mentioned above, it is more suitable to use AI to price-match than a centralized system. In the very beginning when there is no Oder, AI will record the Oder book. It only requires us to go from the inside-out to match the transaction. It will then generate a transaction, and this will continue indefinitely. You can refer to the centralized exchange market, taking for example how the value between IDEX and EtheraDelta can be exchanged. And in the future, micro-grids will communicate with each other, which will gradually eliminating the price difference, or even lower the price. Because setting up different electricity prices for different time slots of the day is meant to reach an equilibrium between supply and demand, centralization and decentralization are concepts well-known by traditional blockchain users. In fact, it does not need to be emphasized whether it is centralized or not; the only way towards development is through distribution or weak center mechanism. So the central node will also become a member of the distributed node.

Ivan Jiang: So I will purchase your “power wall,” place it in my home, and provide electricity to other people while earning tokens for myself?

Andy Li: Yes, this is one method for a cold start. We hope to encourage people to purchase energy storage systems by providing clean energy storage methods and also encourage the world to support Eloncity protocol energy storage devices. For every 1 MWh of clean energy stored, 16 ECTs can be rewarded. When the total stored clean energy exceeds 1 TWh, the same number of ECTs can be rewarded for each 2 MWh of storage, and so on. Before the end of this incentive plan, 32 GWh of stored clean energy can reward one ECT. 32GWh of electricity would be enough to support 1 million households for one day! In addition to receiving ECT rewards, people can sell extra power during peak hours to gain additional revenue investing in energy storage equipment. We hope these two methods will persuade large numbers of people and operators to invest in energy storage equipment.

Eloncity is not Tesla Energy 2. Although we greatly admire Elon Musk for leading the revolution in clean energy and for his tenacious spirit of trying to make the world a better place, Tesla Energy uses a centralized (single-node) method. Its speed for building pre-meter energy storage equipment is restricted by power companies, and the speed is just not fast enough. We hope that we can motivate society’s efforts towards jointly building a post-meter energy storage system that would be thousands of times faster and would be able to cut back on distributed clean energy usage. We decided to open up a whole set of scientific and technological methods to encourage manufacturers from all over the world to work together to develop and manufacture PhotoVoltaic (PV) energy for distributed energy storage systems, the energy storage system itself, and also power conversion and exchange equipment. They would then directly sell this equipment to developers, system integrators, electrical contracting installation companies, and regional governments. We will also exand and open the blockchain trading system and software for calculating fair trade prices. The community could build a blockchain-based trading system on its own, and utilize AI to reduce instances of user arbitrage. Our goal and hope is that this kind of self-sufficient micro-grid community would grow and multiply and that we would not need to fight this on our own.

Chun Jiang: So actually you call yourself Eloncity to show respect to Elon Musk!

Andy Li: Yes, that’s because we are standing on the shoulders of giants. For example, we are benefiting from Elon Musk, Thomas Edison’s direct-current, and Nakamoto Satoshi’s blockchain technology. This is the mission of our time. Tesla is working on it as well. We share a common goal.

Liren Chen: Tokens can be sent without having blockchain technology. Are there a lot of people that think “token” equals “blockchain?”

Chun Jiang: Do you have any specific technology implementation plans?

Andy Li: We currently already have a set of solution plans. There are cases implemented in US and Mexico, and we have successfully deployed a village in Sanguanico, Mexico to help achieve micro-grid autonomy.

Hanyu Liu: Could you talk more concretely about how to make battery factories increase in value?

Andi Li: In our country’s PhotoVoltaic (PV) industry, we can easily see that the profits of manufacturing and IP are now entirely controlled by companies such as Tesla Energy and SunRun. However, in this situation, we are influenced by the negative effects of the massive trade deficits between China and the US and China and Europe. Eloncity hopes to be able to change this situation so that battery factories can genuinely have added value. By creating profits that are not caused by manufacturing efficiency, we want to encourage investment in battery technology, increase the energy density ratio of the battery, and fundamentally reduce the unit cost of batteries. We encourage people to purchase energy storage systems by providing clean energy storage methods, while at the same time battery manufacturers have higher sales (similar to mining machines), which is a positive cycle. In this way, it will be possible to push the world towards energy storage devices that support the Eloncity protocol.

This is the model and data we use to leverage the pricings between peak hours and non-peak hours; it can also be found on our app.

Chun Jiang: Would you please elaborate more on how you plan to reach your goals with bitcoin technology?

Andy Li: Let me emphasize this again: we are not solving the problem of blockchain expansion… we are not recreating the wheel, We are reforming the renewable energy. However, let me share more about our efforts in the blockchain. First of all, we have formed partnerships in blockchain technology development, and our partners support Eloncity wholeheartedly. Regarding the underlying blockchain, let’s start with simple and straightforward data, TPS and PS of our main blockchain can reach 5000+. However, we will use the side blockchain to achieve the interconnection between the regional micro-grids. How fast is the side blockchain? There is no upper limit because of the hierarchical structure. The transaction speed of the micro-grid is proportional to the speed of the side blockchain of the micro-grid. Let’s brainstorm about it, and maybe we can solve the energy problem of the multi-planetary species of the universe!

Ivan Jiang: I heard that you are close to Jack Ma?

Andy Li: Yes, Jack once said that he would invest in any project that I initiated. However, I‘m not sure if he would invest in my blockchain project because he has always banned Alibaba employees from participating in ICO-related projects. I appreciate Jack’s recognition, but I would not force him to invest in my blockchain project.

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