EBN Ecosystem Value Proposition

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Let’s talk about something different…

Energy Blockchain Network (EBN) offers the energy industry a new conversation with fresh perspectives. In a previous post, we explained that while others focus on the downstream peer-to-peer (P2P) & transactive energy (TE) markets, EBN will focus on the upstream supply chain management to facilitate the P2P & TE markets. EBN’s upstream value proposition to the energy industry has five core categories:

1. Value Recognition & Reward
2. New Lead Registry
3. DER Asset Registry
4. P2P & TE Markets Enabler
5. Emerging Business Models & Products Enabler

In this post, we will systematically break down each of these core categories by providing a clear definition of the:

1. Use Case(s);
2. Problem; and
3. EBN Solution

For more information regarding the lead origination process, distributed energy resource (DER) supply chain management, EBN ecosystem and rewards program, etc., please see the EBN Publications archive. We recommend a chronological review to establish a solid, foundational understanding.

1. Value Recognition & Reward

• From initial DER project (asset) origination through the asset’s lifecycle.
• The ecosystem will develop, manage, and deploy recognition mechanisms to reward value created in real-time (reference figures in our previous post).

Use Case 1: Lead Origination

Problem: There’s a shortage of quality lead originators today because 1) origination requires a significant level of work with a distant payoff (most originators are paid 6 months after submitting a lead when the project is built) and 2) there is small value to the originator relative to the value they bring from their existing relationship with the customer (the ONLY part of today’s DER asset supply chain that is not commoditized). For brevity, reference EBN’s blog post titled ‘The Value of Lead Origination’ which explores this problem in more detail.

EBN Solution: We solve these problems by 1) using a stablecoin (or stable token) to pay originators the same day they submit their lead info (we continue to pay more at each stage as they help us move a lead toward a constructed project) and 2) experimenting with different value creation mechanisms and game theories to better reward and align the originator with the project’s lifecycle. Paying lead originators with a token in near real-time (rewarded progressively or incrementally) better incentivizes origination because it reduces payment time, increases reliability via smart contracts, and allows for experimenting with new payment models.

Note: After a lead is submitted and qualified by the network, Platform Hosts Solar Site Design (SSD) and Correlate will manage lead development and installation on their existing platforms.

2. New Lead Registry

• Documents origination, organizes data, and manages the process associated with the Lead’s lifecycle.
• Leads will have attributes that are built over the lifecycle process (as the state changes).

Use Case 2: Project Developers / Engineers

Problem: Customer acquisition is costly and inefficient today because each firm is competing and spending duplicate resources to curate the same qualified lead. This contributes to high soft costs.

EBN Solution: We provide industry the required marketing layer to efficiently organize and validate leads. Project developers can reduce their overhead business development costs by obtaining a lead from the registry that is pre-qualified and ready for development.

Use Case 3: Integrators / Installers

Problem: Integrators specialize in installing “construction ready projects.” A construction-ready project is one that has already been engineered (developed) by a project developer to generate the project specifications and drawings (analogous to the blueprints for building a home). Integrators are expending duplicate resources to obtain construction-ready projects, and/or having to hire a project developer to perform the engineering. This contributes to high soft costs.

EBN Solution: We provide industry the required project development layer. Integrators can reduce their overhead marketing costs by obtaining a lead from the registry that is already developed and ready for construction (i.e. the engineering is done).

Note: This concept plays to the “long tail” of the solar and related energy industries (i.e. we’ve seen that it’s cheapest/best value for the consumer to have local installers). The biggest challenge for local installers is the marketing cost. We will create the registry / marketing engine for the long tail of installers.

3. DER Asset Registry

• Every DER project (asset) will have a unique digital identity with various attributes that get refined over the lifecycle and updated as needed (reference figures in our previous post).
• The registry can be utilized for varying use cases within the EBN platform as well as made available on a data layer for third-party blockchain ecosystems. We believe this should be a “community” registry with the vision of becoming the Google Maps for the energy industry.

Use Case 4: Utilities

Problem: Hedging against future, worse case scenarios are costly because they require overbuilding centralized infrastructure. For example, utilities have expensive natural gas peaker plants on standby and overbuild the transmission and distribution (T&D) system to support only a few hours a day (out of the year) for peak demand periods. This is both expensive and a poor use of capital resources which ratepayers (i.e. anyone who uses electricity from the utility) must cover — without choice.

EBN Solution: In addition to scaling DERs that reduce electrical demand from utilities, we will provide utilities with valuable DER asset data (installed and pipeline) so they can run enhanced models and forecast scenarios. This will give utilities an improved ability to coordinate events that provide grid flexibility (e.g. demand response, demand-side management) and resiliency (e.g. down power lines due to weather) during times of need versus overbuilding costly centralized infrastructure. We will also provide utilities with real-time, or near real-time, data that can be utilized for grid management and energy data analysis.

Trend: Utility Dive explains that similar to storage, distributed energy resources (DERs) are positioned to gain broad utility acceptance in 2018. Long envisioned as a threat to reliability and finances, a number of utilities are realizing the potential of DERs to solve system needs usually reserved for bulk power assets like plants and transformers.

Second Problem: In the above article, it’s noted that utilities across the nation are still figuring out how best to get into the distributed energy business, but survey results indicate the vast majority are trying to figure it out.

EBN Solution: We provide industry the required project development layer. Utilities can reduce their overhead marketing costs by obtaining a lead from the registry that is already developed and ready for construction (i.e. the engineering is done).

Use Case 5: Retail Electric Providers & Commodity Energy Brokers

Problem: Decentralization efforts (e.g. DERs, blockchain) can be detrimental to an existing intermediary’s business model if they are not planning and innovating accordingly. Energy retailers & brokers are intermediaries that provide a “middleman” service. DERs reduce the amount of energy an end user needs to buy from an energy retailer or broker (decreased revenues year-over-year). Blockchain allows end users to buy and sell electricity P2P which can be organized, tracked, and settled without existing intermediary (middleman) services.

EBN Solution: We can provide energy retailers & brokers with the means to provide customer-centric DER solutions (via EBN application layer Platform Hosts SSD & Correlate) to their existing and future customers. This will increase their customer “stickiness,” while opening a myriad of new value streams that can be monetized to increase their bottom line profit.

Use Case 6: Utilities, Electric Vehicle (EV) & Behind-the-Meter (BTM) DER Asset Owners

Problem: Utilities lack an adequate solution for the new energy economy of tomorrow to effectively manage fleet EV charging in their service area. Existing infrastructure isn’t capable of communicating to blockchains nor does it allow assets to become economic actors. In addition, existing DER databases are fragmented and don’t allow for downstream blockchain use cases.

EBN Solution: The DER asset registry will create a blockchain data structure with all assets (EVs, carport & rooftop solar PV, etc.) having a unique blockchain identity so they can communicate with each other and become economic actors. The DER asset registry is far more than just a database. It assigns a unique digital identity to each asset so that we can unlock and enable value-added blockchain applications like fleet EV charge management or TE. We can achieve this by installing specialized blockchain-IoT chips in meters at the supply point that will allow us to build the communication infrastructure for devices to interact with each other and the ledger. We can then have EVs charge at carports and pay the carport for the electricity. In this case, both the carport and EVs need a unique digital identity in the DER asset registry so that we can keep track of who buys what, how much, and from whom. Think about this for a second, imagine a world where autonomous EVs swarm coordinated efforts to manage fleet charging with DER assets in a utility’s service area and/or with owners of BTM assets (e.g. carport & rooftop solar PV systems).

Trend: This use case demonstrates a broader opportunity extending beyond fleet EV charge management. It’s about structuring DER asset data into a usable form for any blockchain application to leverage by turning DER assets into economic actors. The transactions are occurring machine-to-machine (or asset-to-asset), no humans are involved. Humans will need to program or set, the initial parameters, but the assets execute in real-time without humans. The assets will leverage machine learning and artificial intelligence to further drive efficiencies. This frees humans up to do more human tasks and allows DER benefits to scale.

Use Case 7: Energy Efficiency (EE) Measurement & Verification (M&V)

Problem: Existing M&V techniques are outdated and inadequate at tracking energy savings against a baseline.

The baseline is a reference to how much energy was used (or “consumed”) before a measure or intervention (e.g. DER) was installed/implemented. Think of baseline like weighing yourself before you change your diet and implement a workout plan (measures & interventions). After a year of eating healthy and working out, you can weigh yourself and compare your new weight against your “baseline” to track results. Energy savings and M&V is similar in concept.

The problem is not limited to any one sector, efficiency company or utility. Rather, say experts, the industry is systematically plagued by an outdated way of measuring performance — partly because efficiency is hard to track compared to energy generation, and partly because of the industry’s inability to modernize. -GTM

Second Problem: The market does not adequately value EE savings — the value of the negawatt.

Negawatt is a unit used to measure the amount of energy saved (in megawatts).

Watt is the SI unit of power, equivalent to one joule per second, corresponding to the power in an electric circuit. Consumers may notice their electricity bill rate is reported in $ per kilowatts-hours (kWh) which is simply 1,000 watts per hour. Reference here for further explanation on the difference between a watt and watt-hour.

EBN Solution: Leveraging the DER asset registry, we can provide energy consumers, utilities, and program administrators a tracking and reporting layer that measures and verifies savings, coordinates performance payments and settlement against a particular DER, measure, or intervention. This use case demonstrates the value of blockchain and its inherent ability to establish trust among parties that can be governed by pre-negotiated smart contracts.

In the energy efficiency program space, blockchain could add security to the exchange of information among customers, program administrators, and evaluators. The same way that blockchain authenticates that a token or unit of cryptocurrency is valid, it can authenticate the validity of a volume of customer energy savings. More efficient markets, more effective programs: such a future would give individuals, companies, and collaboratives mechanisms to monetize the value of their energy resources (including energy savings) — ones with lower costs of entry and more fluid transactions than our current energy trading platforms. -ACEEE

Use Case 8: Fractional/Shared Ownership

This is a placeholder section due to regulatory uncertainties and other factors.

4. P2P & TE Markets Enabler

• Building the DER Asset Registry provides a seamless transition to facilitating P2P & TE markets.
• The EBN platform looks to encourage application layer development to enable P2P & TE market plugins from existing market solutions. We see blockchain-to-blockchain network communication as vital to scale blockchain solutions in the energy industry.
• In addition, this platform could later develop a P2P & TE platform application layers of its own to fill in gaps with existing market solutions.

Use Case 9: P2 & TE Firms

Problem: These firms need 1) DER projects (assets) that are commissioned and operational before they can be used in their markets and 2) attribute data on the DER asset so it can be turned into an economic actor.

Examples of DER attributes: Asset owner, location, system type, system size, operational parameters (what it can do now or made available to do in the future).

Problem (continued): It’s important to note that the P2P & TE components are downstream after the DER asset is commissioned. Simply put, P2P & TE markets rely heavily on a healthy pipeline ecosystem upstream that is installing the DER infrastructure assets they wish to utilize on their platforms. This concept is analogous to the Internet. Before we could stream Netflix and use other Internet applications (Amazon, Facebook, Google, etc.), we first needed to deploy the infrastructure (servers, wires, etc.) across the globe. P2P & TE are blockchain applications that require DER infrastructure to be installed.

EBN Solution: A symbiotic relationship opportunity exists between the upstream and downstream ecosystems. While others focus on the downstream P2P & TE markets, EBN will focus on the upstream supply chain management to facilitate the P2P & TE markets. This is precisely what EBN’s first two energy applications (existing market platforms SSD & Correlate) are doing today. EBN cultivates a healthy pipeline ecosystem and serves as the link between the upstream supply chain management and downstream P2P & TE markets. We will provide these firms with advanced notice of pipeline projects so they can plan and accelerate enabling the DER asset’s participation in their markets. We will serve as an industry marketing layer for customer acquisition and onboarding by providing early state efforts. For an analysis of the upstream vs. downstream ecosystems, reference EBN’s post titled ‘Upstream vs. Downstream: DER Supply Chain, Explained.’

5. Emerging Business Models & Products Enabler

• Continuing the principles of enabling P2P & TE market integration, this platform will encourage application layer development to enable plug-ins for new and emerging business models, products, platforms, and solutions.
• The EBN platform will utilize open sourced communication protocols and standards to cultivate blockchain-to-blockchain integration and cross-chain communication.

Use Case ’n’: To Be Discovered

Value of Open Application Development: Precedent Examples

We have all witnessed the tremendous level of development that has been sparked in the community by simply enabling smart contract development on Ethereum’s open-sourced public blockchain. As a result, other open-sourced public blockchain development examples (e.g. NEO, EOS, Stellar, BitShares) are emerging. To clarify, the EBN network is not looking to develop a new public blockchain. Rather, we will “future-proof” our design by remaining agnostic to blockchain technology and consensus algorithms. We believe in the value of enabling application layer development, and will promote the same general principles and value proposition as demonstrated by public blockchain protocols.

EBN Ecosystem — P2P, TE, Emerging Business Model Enabler Overview (Source: EBN)

The Close

EBN is a multi-sided platform which coordinates lead originators (sales agents/reps), engineers, developers, integrators, installers, utilities, customers, etc. to find & build energy projects. EBN is an interoperable market coordination and network infrastructure layer for the energy industry featuring first-of-its-kind solutions:

1. Rewards Program to Accelerate Lead Origination Velocity

Designed to recognize and reward value associated with originating, engineering, and installing DER infrastructure assets (e.g. rooftop solar PV, batteries).

• The Lead Registry will serve as a shared, trusted, and immutable registry to facilitate compensation for the value provided by participants who originate, engineer, and install new DER projects.
• The EBN ecosystem will leverage blockchain and distributed ledger technologies to establish the early structure (via smart contracts) needed to ensure value creators are adequately recognized and rewarded (compensated) for the value they deliver.
• When programmed correctly, blockchains and distributed ledger technologies are extremely effective at exposing who in a value (supply) chain actually delivers value.
• Formalizing the process and adding real-time, autonomously triggered events (via smart contracts) will increase value for early-state work. This will drive increased participation and leverage network effects of the ecosystem leading to a large increase in DERs coming online.

2. Programmable Processes for Building Asset Registries & Enabling Use Cases

Data captured during the Lead Registry process above will be used to build the DER Asset Registry so each DER infrastructure asset has a unique digital identity. Technical data will be structured in a blockchain-managed and organized DER Asset Registry, and provide an interoperable layer to coordinate information, customers, and industry activities related to lifecycle asset management and participation in the energy industry.

• The DER Asset Registry is a community registry of DER assets which will store and organize data on the blockchain to provide easy retrieval for various future energy+blockchain applications.
• The EBN platform encourages third-party application layer development and partnerships to enable existing and emerging market solutions.

EBN is building an ecosystem that will lead the Energy Technology Convergence. The mission is to drive DER asset supply chain efficiencies and scale installations for a low-carbon future — today! Thank you for following us on this journey as we illustrate how we’re working towards The (Energy) Promise Land.

The public release of our Whitepaper will be next month. Be sure to sign up for our newsletter (link below) to receive advanced notification and access to download ahead of the public release date.

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