Today the Energy Web Foundation (EWF) announced that its public blockchain is online. The group has 100 affiliate members and expects 17 dApps to be uploaded to the network in the coming weeks.
The foundation has too many known members to mention. Global brands such as Total, Shell, GE and Siemens are in the game. But most are producers or regional electricity networks. In the United States, there’s Duke Energy and PG&E, but they also have big brands from Asia and many of the biggest European suppliers. Many startups are also participating.
This combination of members reflects the two founders of EWF. It’s a marriage between think tank Rocky Mountain Institute and its Rolodex of Big Business and software startup Grid Singularity.
The target market is important. In 2018, new investments in the sector amounted to $ 1.85 trillion according to the International Energy Authority. Of that amount, $ 775 billion went to the power sector and over $ 300 billion went to renewables.
While there are currently many industrial sectors changing due to technological change, the energy sector is shifting from regional monopolies and oligopolies to distributed supplies. The merger with distributed ledgers and a public blockchain, in particular, seems to go without saying.
âAccording to industry forecasts, by 2030, consumers would be investing more money in leading-edge devices. [such as] solar photovoltaic [photovoltaic], batteries, charging stations, electric vehicles, smart controls, which electric utilities would invest in power generation and power grids. This is a massive and unprecedented change, âsaid HervÃ© Touati, CEO of EWF.
In the past, the Belgian grid operator Elia has focused on the high voltage transmission grid with a small number of power plants. It is now looking to leverage EWF’s blockchain to expand its reach. âTo ensure a successful energy transition, blockchain is one of the necessary tools,â said Kris Laermans, project manager at Elia Group. âWe have demonstrated with our last blockchain project [with EWF] that technology will help lower barriers to entry for prosumers and consumers in the flexibility market and reduce administrative costs through the automation of regulations.
EWF Commercial Director Jesse Morris explained the void filled by blockchain. âWe really don’t have a digital infrastructure capable of orchestrating and coordinating millions, if not billions of internet-connected devices. It is a question of whether we are talking about electric vehicles, whether we are talking about batteries, whether we are talking about power plants. Most of the grid is pretty analog.
He continued, âBlockchains seem to be able to solve some of the challenges facing the energy industry in this area. We do not have digital identities for customers in most cases. We do not have digital identities for assets. For example, we have no way for devices like a Tesla Powerwall to perform extremely low cost, automated financial settlement.
That is why?
That’s the big picture, but what is Energy Web specifically for? The first wave of dApps falls into three groups. First, the certification allowing electricity consumers to confirm that their source of electricity comes from renewable energies. We have already written about several EWF projects in this area, including separate Iberdrola and Acciona projects in Spain.
Second, there are dApps around electric vehicle charging that simplify the process. The third and most complex area is the response to demand. To smooth supply and demand during off-peak times, renewable energy can be stored in batteries and customer assets can deal with other machines or the grid operator.
A new public blockchain
A public blockchain is a more logical choice due to the large number of prosumer energy providers that EWF aims to connect. Since EWF is focused on green energy, it couldn’t run an energy-wasting proof-of-work blockchain like the public Ethereum and Bitcoin chains. Instead, it uses Proof of Authority (PoA), which means that initially ten trusted companies are running validation nodes. Businesses are a mix of utilities, network operators, and blockchain developers. By using PoA, EWF can enable low cost transactions and greater scalability.
So it is a semi-authorized blockchain as long as the validators are approved, but anyone can participate as a user.
But public blockchains present unique regulatory and operational challenges for businesses. Here is a quote from an anonymous member. âAs a business, we can’t control everything that happens on a node. Because, again, it’s a decentralized network and things are happening above that network. This means that the company cannot host this node inside its IT perimeter. But they are also not allowed to host things outside of its IT perimeter. It will probably take some time to solve these kinds of challenges and the sandboxes will help.
Since this is a public blockchain, validators must be paid, so there is a token. EWF did not run an ICO. However, he has received contributions for his work on the blockchain, for helping to create dApps, and for community building efforts. All organizations that made contributions received tokens.
As an enterprise-grade public blockchain, privacy is an issue. It uses the popular off-chain data storage solution with on-chain hashes (fingerprints). Going forward, he is also exploring Parity’s secret store and some zero-knowledge proof solutions.
For businesses, one of the big questions with public blockchains is the governance that EWF plans to evolve. Initially, there are the ten validation nodes. Any code changes will be recommended by EWF and node operators can provide feedback. So at first EWF is similar to a flight attendant.
In a second phase, when there are more nodes, the validators vote on the changes. But there is a more innovative mid-term plan to give dApp developers a big say. The more gas a dApp uses, or rather, the more popular it is, the higher the vote. But there will be limits to prevent popular apps from dominating network governance.
If the energy web network were to go down, would the lights go out? Morris from EWF responded that a decentralized network could improve cybersecurity. But the reality is that these initial dApps are more focused on traceability. It’s not about providing a new digital infrastructure to automate the network. Morris concluded, âOur affiliates, I imagine, would be very careful about fully digitizing these functions, whether they are using a public blockchain, a private blockchain, or some other digital solution. “