Much of the impetus for the development of blockchain is coming from innovative startups, but its wider implementation in the energy sector will depend on its uptake by the utility players.
In Europe, the transmission system operator TenneT, with operations in Germany and the Netherlands, has launched the region’s first blockchain projects to test its use in managing the network in the two countries.
“These pilot projects are part of TenneT’s broader strategy of preparing the electricity system to accommodate the growing volume of renewable energy,” says TenneT CEO Mel Kroon.
Both are using IBM’s permissioned blockchain platform built on the Hyperledger framework, which is implemented in various sectors including financial services, supply chains and healthcare.
Blockchain applied to electric vehicles
The project in the Netherlands with the green energy supplier Vandebron is investigating the use of customers’ electric vehicles (EVs) to make available flexibility to help TenneT balance the network at times of peak demand.
The blockchain enables connected EVs to participate by recording their availability and their action in response to signals from TenneT. When a power increase is needed on the grid, EV charging is briefly stopped and the car owner is compensated for the interruption.
Renewables integration and storage solutions
The project in Germany with the storage solution provider Sonnen draws on a network of residential solar batteries to help reduce the imposition of limitations on wind energy at times of insufficient transmission capacity. This is a particular issue in Germany, with an excess of wind energy in the north but limited transport capacity to the industrial centres in the south. Link the EQ microgrid article
The blockchain presents the operator from TenneT with a view of the available pool of flexibility, which can be activated at the push of the button, after which the blockchain also records the batteries' contributions and credits.
With both of these projects in the early stages, no results are as yet forthcoming and the first are expected mid-year. However, TenneT is confident of the outcome and of blockchain as a technology, saying in a statement: “Easily scaled and with attractive economics, blockchain is set to play a decisive role in our future energy supply, providing the technology connecting millions of decentralised energy systems.”
Once the concept of the pilots is proven to work, TenneT intends to open them up to other parties to join. And, with the growing need for system operators to secure flexibility to integrate and manage renewables, the potential is significant.
Utility consortium supports flexibility
While TenneT is investigating flexibility for transmission, a consortium of UK energy companies is being set up by the London-based startup Electron to support the development of a blockchain flexibility trading platform at the distribution level.
Last October, Electron was awarded government funding to prove the role of blockchain in balancing the electricity grid.
Members of the consortium include the network operators Northern Powergrid and UK Power Networks, suppliers EDF Energy and Open Energi, energy companies Shell and Statkraft, demand response providers Flexitricity and KiWi Power and consultants Baringa.
The intent of the group is to co-develop a commercialisation model and the initial product set for Electron’s flexibility trading platform. “By working together, we recognise the current system needs to be changed and we are designing a system for present and future market participants,” comments Paul Ellis, CEO and co-founder at Electron.
Alongside this initiative, Electron, which is also supported by Siemens and National Grid, continues to focus on other blockchain use cases, including supplier switching and asset registration.
Does blockchain live up to the hype?
Notably consortium member UK Power Networks also is partnering in a project with energy software company Open Utility to trial its Piclo peer-to-peer platform for local flexibility. The initiative is also supported with UK government funding. While the flexibility end goal is the same, the Piclo platform brings an alternative, algorithm-based approach.
As such, UK Power Networks will be uniquely placed to provide comparative insights on these two state-of-the-art data processing technologies and how much blockchain lives up to the hype that surrounds it.