Blockchain is shaping the future of energy infrastructure services

Blockchain is a decentralised, ultra-secure transactional technology used in conjunction with smart grids to intelligently manage the electricity networks of tomorrow.

OVERVIEW

Smart grids at the core of energy services

More than 200 million smart meters in Europe, 35 million of which belong to Linky in France, will be operational by the dawn of the next decade. Coupled with the Internet of Things and computerised data management, analysis and processing tools, these new connected devices constitute the backbone of the smart grid, the infrastructure that is set to replace the traditional electricity network.

Characterised by its ability to establish two-way communication between energy suppliers and consumers, this “intelligent network” is unique by virtue of its capacity to measure the state of the infrastructure in what is almost real time. This means it can help balance out the relative needs of production and consumption, not least in order to take into account the increasing proportion of renewable energies (RE). Out of a total global electricity capacity of 25,721 TWh, wind and solar energy production rose to 1,570 TWh in 2017 (and to 1,088 TWh in 2015). This figure could reach 8,500 TWh in 2040, according to a scenario put forward by the IEA (International Energy Agency)[1].

Renewable-energy production is accompanied by a growing demand for own-consumption electricity from photovoltaic panels installed on home roofs, apartment blocks and industrial sites, developments that are pushing the emergence of the microgrid. Local energy loops flourishing within this system are driving forward the principle of "Transactive Energy”, whereby energy flows are directly exchanged between neighbouring "consumer-players".

By incorporating intermittent renewable-energy production, smart grids encourage the growth of energy-related services, whether to accumulate several energy sources as part of a supply contract, facilitate own-consumption, meet "green” energy demand or power e-mobility. These are just some of the services creating a huge upsurge in the volume of transactions. To manage these transactions in real time, guarantee traceability of their history and provide storage for all data, blockchain seems a very relevant technology to explore.

TAKING UP THE CHALLENGE

Automating network management

Blockchain can be likened to a user-to-user information-exchange technology that prohibits any modification or deletion of data, even those done accidentally. Transactions are approved by a principle of consensus, and stored in a timestamped, ultra-secure manner in a register (database) distributed to each of the network's members. The register’s decentralised nature makes for a system with transparency, integrity and immutability, without the need for a trusted third party. In addition, smart contracts – applications designed to execute tasks once all predefined conditions have been fulfilled – add a layer of automation.

These features fulfil the needs of microgrid management, of which the Brooklyn Microgrid Project is cited as a perfect example, having set up a blockchain platform in 2016 to enable residents equipped with solar panels to automatically sell on their surplus energy to others living in this New York district. New ideas have come thick and fast ever since. In France, Bouygues Immobilier is experimenting with a blockchain designed to trace local consumption of electricity produced by solar panels on apartment block roofs in the Confluences eco-district of Lyon. In Premian in Hérault, the company Sunchain uses blockchain to confirm solar production and consumption levels in six public and private buildings, for the purposes of own-consumption measurement and distribution. In both of these examples, electricity transits via the Enedis network, which transmits the data gathered from Linky smart meters. In Germany, Vertuoz by Engie provides transport network manager Tennet with a blockchain to balance out the network by using electricity from V2G [2] car batteries, and compensate their owners in return.

These examples illustrate how the “chain of blocks" can provide energy operators with the means to automate production and consumption measurements in real time, in order to guarantee network supplies and trace the data exchanged during these transactions. It can then be used to certify the energy's origin, and even offer a micropayment service for consumption, depending on the services subscribed to. By ensuring the reliability of these transactions, expanding market access to new players, and participating in energy transition (e.g. Pay per Use for green energy), blockchain is speeding up the energy ecosystem paradigm shift and offering new perspectives for co-managing the electricity network of the 21st century.

Benchmark figure

A 12 billion dollar market

Estimated at 208 million dollars in 2017, the market value of blockchain in the energy world is set to leap by an average 78% every year, nudging $11.9 billion in 2024, according to Zion Market Research.

Case study n°1

Oslo2Rome project: supporting roaming e-mobility

In order to encourage cross-border e-mobility, in 2017 European operators (including Iziva by EDF) trialled blockchain developed by the German company MotionWerk. Its aim is to simplify recharging in the face of increasingly complex access and payment methods, due to the fragmentation of the charging-station network. Using a customer blockchain installed on operators’ IS, the solution provides a decentralised messaging system to operate data authorisations and sharing. Drivers identify themselves on their mobile app at any charging point belonging to any operator, and pay using a virtual wallet according to the price options offered. This solution means that e-mobility customers have a vast selection of charging stations to choose from, without having to worry about suppliers and payment methods.

Case study n°2

Automated management of own-consumption

As part of a collective own-consumption project, co-owners are joining forces to use the electricity produced through photovoltaic panels. A blockchain is used in conjunction with IT infrastructure (smart meters, sensors, IS) to trace production flows and distribute them among participants in line with the agreed rules. Network management also have access to analysis keys, so as to determine the flows attributed to each user for the purposes of invoicing and managing surplus redistribution. Fed back to users, consumer data then asks customers to synchronise certain energy uses with peak production periods (activating hot water cylinders, charging electric vehicles, etc.). The benefits include energy autonomy, potential savings and a greater awakening of ecological conscience.

Case study n°3

Certify “green” energy

To guarantee to its customers that the energy consumed is definitely from renewable sources, energy suppliers adopt an invoice settlement solution to replace the guarantee of origin with a digital form of proof that can be viewed on a decentralised register. The solution establishes a direct link between production data and consumption data by using tokens (a payment method in this case), which can be exchanged on a blockchain. These digital tokens ensure that the value is transferred from the consumer account to that of the electricity producer. Consumption is measured in 30-minute increments so as to offset any renewable-energy intermittence and to distribute invoice payments as fairly as possible between the various producers concerned.

#An observer’s view

"The inclusion of renewable energies in the network and the concept of consumer-players (or prosumers) are shaking up the model of centralised electricity production. By enabling us to trace transactional data in a secure and transparent manner, and by automating contract management, blockchain is simplifying interactions between producers and consumers, and acts as a growth accelerator for new service models in the energy ecosystem.” 
Philippe Guillen, Global Solutions Manager, Energy & Utilities, Gfi.

#Gfi Solutions

Gfi has designed Blockchain Factory (GBF) for organisations keen to trial or roll out their own private blockchain. Accessible from a web browser, this solution can be used to develop a P2P exchange network in just a few clicks, with no specialist technical expertise, and expand it to accommodate the arrival of new members (partners, suppliers, etc.). Available in SaaS or on-premise mode, GBF provides a suitable infrastructure and supports the various technological approaches currently on the market (including Hyperledger, Ethereum and Quorum). Customers can roll out their own decentralised apps (while awaiting the implementation of a dedicated catalogue) so as to configure their own services. By eliminating the technological complexity, GBF enables energy suppliers to create a blockchain in just a few minutes (compared with several days, in the case of manual activation).

 

[1] Forecast drawn up as part of the IEA’s “New Policies Scenario” (NPS), on the basis of current policies affecting the energy market and proposals for achieving certain objectives, including the Paris Agreements. Another, more ambitious, forecast based on the “Sustainable Development Scenario” (SDS) estimates solar and wind energy production standing at over 14,000TWh in 2040.

[2]V2G (Vehicle-to-Grid) technology provides a flexible service that draws electricity from electric car batteries to power the network when necessary.

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