Energy Web Quarterly Update

Using web 3 technology to solve real business problems.

Update from Jesse Morris, Chief Executive Officer of Energy Web

The first quarter of the year is already behind us, and I could not be more excited about what we’ve accomplished and what’s to come in the Energy Web ecosystem.

In this update, leads from our three primary geographies have assembled a brief update on our impact in each region and important energy market developments. But first I’d like to share a brief update on a significant evolution of the Energy Web stack itself.

After years of deploying applications with dozens of companies, our organization and ecosystem have a much clearer understanding of exactly where and how web 3 technologies applied to the energy sector can create business value. More specifically, our community and technology have evolved to a point where three solutions are now being rolled out with customers around the world. They are:

• Switchboards, our enterprise-grade self sovereign identity and access management solution built on the W3C administered decentralized identifier standard. Examples include Stedin’s identity and access management solution, CAISO flex alert, and our work with Vodafone, Kigen, and KORE wireless.
• Decentralized data exchange hubs, which enable different combinations of energy companies, prosumers, and individual devices to exchange and process granular data in a decentralized way. Examples include Project EDGE, Project Symphony, and all e-mobility related work in our ecosystem.
• Green proof platforms, our solution focused on enabling next-generation traceability for low, zero, or negative carbon supply chains. We are currently applying green proof platforms to two supply chains, sustainable aviation fuel, and renewably-produced cryptocurrency.

At the end of 2021, we announced a major partnership with Parity Technologies to bring a new piece of technology to market, the Energy Web Consortia Relay Chain. This quarter, we have conducted a detailed design exercise with Parity to fine-tune the design of this critical new addition to the Energy Web stack. We are nearly ready to begin announcing the details of our work in this area.

Here’s a high-level preview for how the Energy Web Consortia Relay Chain will work: each solution described above — switchboards, decentralized data exchange hubs, and green proof platforms — will soon be able to be deployed as individual instances of Energy Web technology with local blockchains powering each solution, all connected together and secured by the global Energy Web Consortia Relay Chain. This architecture will be powered by a novel token economic model that we believe will be the first instance of real-world economic activity translating to the fundamental value of a cryptocurrency.

There is an immense amount of detail to unpack regarding the Energy Web Consortia Relay Chain and its implications for the Energy Web ecosystem and our mission to decarbonize the global economy. But for now, I can confidently say it’s the most exciting technology development I’ve been a part of since co-founding Energy Web in 2017, and I can’t wait to share the full story in the coming weeks. Stay tuned!

Europe & Middle East / North Africa

Impact
Over the past several months, we have successfully completed a number of flagship projects in Europe. These projects demonstrate accelerating adoption of Energy Web solutions by key industry players, energy market participants, and original equipment manufacturers.

Energy Web, KORE, and Kigen developed a highly secure, efficient, SIM-based open-source solution for internet-of-things device communication. Leveraging SIM cards as a secure, scalable, and standardized hardware solution improves device communication and interoperability. This collaboration between KORE and Kigen leverages the features of eSIM and OPEN IoT SAFE to act as a hardware wallet anchored to an open-source, publicly accessible blockchain-powered by Energy Web. Using Energy Web’s technology, organizations can build their own applications via the world’s first open-source technology stack focused directly on the transition to renewable energy. As part of the collaboration between KORE and Kigen to deploy OPEN IoT SAFE, a purpose-built SDK designed by Energy Web was used as part of the development process.

In February, we announced the development of renewable energy electric vehicle (EV) charging in partnership with Vodafone and Mastercard. The platform will allow verified connected devices on Vodafone’s Digital Asset Broker (DAB) to transact seamlessly and securely with full owner control. This includes EVs transacting directly with charging points, as well as interactions between other vehicles, machines, and IoT assets, unlocking value from billions of devices. The service went live in a trial of a connected EV communicating autonomously and securely with a charging point in Newbury, UK. This trial marks the first-ever showcase of a 100% clean energy charging solution for EVs. The solution, which can be adapted to work with any charging infrastructure and any EV worldwide, including on-street chargers connected to the grid, will allow users to verify and prove that the energy used to charge their EV comes from renewable sources.

Finally, we have been awarded with our first project funded under the Horizon Europe framework program of the EC. The OMEGA-X project brings together top European TSOs/DSOs, industry, and research institutions to establish the grounds for an EU data space in the energy sector. Energy Web will work together with a group of 30 different EU partners to integrate its decentralized products, such as EW Switchboard and Decentralized Data Hub, into the project architecture to allow trusted and secure data exchange between energy market participants. The project has an implementation horizon of 4 years and a budget of approximately EUR 8M.

What’s Next
We are actively working together with top TSOs/DSOs, research institutions, and industrial players to establish large demonstrators across Europe to deploy our products in the context of commercial agreements or state-of-the-art research and innovation funding opportunities. Finally, our commercial and tech teams are focusing on the implementation phase of our Google Impact Challenge grant.

Market Updates
The European Commission (EC) is moving forward with the EU action plan for digitalizing the energy sector. The roadmap of the action plan has been open to public consultation, and the adoption of the action plan by the EC is scheduled for the second quarter of 2022. The action plan focuses on the way digital technologies can unleash the full potential of flexible energy generation and consumption in different sectors and increase penetration and use of renewable energy. The goal of the EC through this action plan is to foster and promote the development of a competitive market for digital energy services and digital energy infrastructure that are cyber-secure, efficient, and sustainable. Moreover, the action plan will support energy system integration, as well as the participation of “prosumers” in the energy transition, while ensuring interoperability of energy data, platforms, and services. Blockchain technology is highlighted as one of the enablers of digitalization in the energy sector, with a focus on enhancing the uptake of digital technologies. These are all outstanding developments for us at Energy Web, who are neck-deep in the process of helping major European energy market participants move digital solutions from minimum viable products into production-grade solutions running on public blockchain-based infrastructure.

Furthermore, the European Technology and Innovation Platform for Smart Networks for Energy Transition (ETIP SNET) released the Research and Innovation Implementation Plan for 2022–2025 which highlights the most urgent research and innovation needs for the next four years. The research and innovation budget requirements for this period are estimated to be on the order of 1 B EUR. Every single one of the nine high-level use cases considered can benefit from the Energy Web technology stack:

• optimal cross-sector integration and grid-scale storage,
• market-driven TSO–DSO and system user interactions,
• pan-European wholesale markets, regional and local markets,
• massive penetration of renewable energy sources into the transmission and distribution grid,
• one-stop-shop and digital technologies for market participation of consumers (citizens) at the center,
• secure operation of widespread use of power electronics at all systems levels,
• enhanced system supervision and control, including cybersecurity,
• transportation integration and storage, and
• flexibility provision by buildings, districts, and industrial processes.

As with other proceedings across Europe, Blockchain technology has been identified as a key component for various projects to enable new services, such as development of robust and low-cost applications of digital technology for peer-to-peer interactions, as well as the design of internet-of-things architectures for mass data communication and processing. Moreover, the implementation plan highlighted the need for standardization of encrypted and authenticated market processes at different timescales for improved reliability to enhance DSO and TSO information exchange with DER, enabled for third party owned PV and storage from different manufacturers and using different technologies. This is exactly what we have designed the Energy Web stack to be able to support; it is incredibly encouraging to see language from energy market participants and regulators in Europe mirror our language almost 1:1 in documentation and funding announcements such as these.

Asia Pacific

Impact
Energy Web is actively bringing to life decentralized data exchange hubs for projects EDGE and Symphony in Australia. Project EDGE — Energy Generation and Demand Exchange — is trialing the development of “future market infrastructure” including the ability for Distribution System Operators (DSOs) to procure energy services from aggregated portfolios of Distributed Energy Resources (DERs). The EDGE project covers Australia’s East Coast market, the National Electricity Market (NEM). An MVP for EDGE was completed in October 2021, and the full production solution will launch in the next two months, and operate through at least March 2023.

Project Symphony relates to the West Coast market (covering Western Australia), aka the Wholesale Electricity Market (WEM). Symphony will see hundreds of distributed energy resources aggregated into a Virtual Power Plant (VPP) which can generate and store electricity at a local level. This VPP will enable DER owners to sell excess energy back to the grid via an aggregator. Project Symphony will run for a period of two years in Southern River in Perth, with the learnings informing future implementation of DER orchestration projects in Western Australia.

Energy Web’s solution for EDGE and Symphony includes Switchboard (our Identity and Access Management solution), Decentralized Data Exchange Hubs, together with a registry of organizations and devices to create a single source of truth for all registration data.

Much of our attention since arriving in Australia has been on delivering for Projects EDGE and Symphony. However, over the past few months, we have engaged a range of local regulators and market participants. We have signed our first new local member — Quinbrook Infrastructure Partners — and will soon begin a 24 / 7 renewable energy tracking project with them using our Green Proof solution to match their retail customers’ energy consumption with generation sourced from renewables.

Market Update

Research suggests the Asia-Pacific region will be a key area of focus for renewable energy development and investment during the coming decade. Many nations are seeking to deliver post-pandemic recovery programs that will target emissions reductions and growth in renewable energy capacity.

Solar and wind energy technologies are forecast to be the main focus for governments across APAC, with offshore wind playing a significant role given potential investment returns and the geography of many Asian countries. The decarbonization push is likely also to see a substantial expansion of emerging technologies such as green hydrogen (which helps fuel heavy industry located across the region) as well as utility-scale batteries.

As APAC energy markets mature in their incorporation of renewables, we see growing demand for Energy Web’s technologies, specifically:

• Decentralized and digital IDs (DIDs): assisting the registration (and thus coordination) of many new generation projects and distributed energy resources, across all jurisdictions, some of which lack a strong (or efficient) administrative center and thus require the support that verifiable credentials facilitate to drive trusted interactions;
• Decentralized Data Exchange Hub(DDHub): the pace of technological change across the energy sector means many governments, both developed and developing, are challenged to keep abreast of and streamline various standards and protocols embedded within clean-tech energy resources. By enabling communication and data exchange between the many “data silos” being created by new technologies, EW’s decentralized DDHub provides a key support pillar for energy markets and exchanges;

Organization and resource registry: maintaining a tamper-proof single source of registration data for devices, people and organizations are critical to facilitating trusted energy transactions and services.

Market Update — United States

In the United States, interest among utilities in scalable, digital solutions to integrate distributed energy resources remains strong. As we approach summertime in the US — when peak load is typically highest — we’ll also see CAISO’s Flex Alert (launched with Energy Web last fall) playing a critical role coordinating customer flexibility during wildfire or weather-induced grid emergencies in California. We continue exploring opportunities with members for the open-source Flex Alert toolkit to support emergency response and other flexibility programs elsewhere — including demand response, managed charging, and “transactive” energy market programs.

In Q1, we also saw a flurry of activity around climate disclosure and ESG standards. In March, the SEC proposed rules requiring major companies to disclose climate-related risks, amplifying discussions about the need for more robust, granular solutions to track, trade, and report emissions associated with renewable electricity and other “green” commodities. 24/7 matching continues to attract attention as an emerging paradigm for impactful renewables’ procurement — including from the US government. And rebounding bitcoin prices, as well as President Biden’s recent executive order on cryptocurrencies, have re-energized conversations around blockchain’s energy use. Energy Web has been working on a green-proof platform-specific to creating greater transparency and impact in this area. We look forward to sharing full details on this solution with the community in Q2!

About Energy Web
Energy Web is a global, member-driven non-profit accelerating the low-carbon, customer-centric energy transition by unleashing the potential of open-source, digital technologies. Our Energy Web Decentralized Operating System (EW-DOS) enables any energy asset, owned by any customer, to participate in any energy market. The Energy Web Chain — the world’s first enterprise-grade, public blockchain tailored to the energy sector — anchors the EW-DOS tech stack. The Energy Web ecosystem comprises leading utilities, grid operators, renewable energy developers, corporate energy buyers, IoT / telecom leaders, and others.