Blockchain for the energy sector – Energy Web Foundation advances

The Energy Web Foundation is readying its open source blockchain for launch, with new features being added
Published: Mon 04 Jun 2018

Blockchain is making headline news virtually daily, as new entrants from across the globe try to muscle in on what is becoming an increasingly crowded space.

While early entrants to the energy sector, such as New York-based LO3 Energy, Electron in UK, Power Ledger in Australia and Sun Exchange in South Africa, continue to mature and commercialise their offerings, it is still early days for the technology.

Most energy sector blockchains are being built on the Ethereum platform but there are others such as Hyperledger and Stellar. With pilots only being conducted with small numbers of participants, there are concerns about scalability, up to hundreds of thousands for large utilities, and speed, with typical applications requiring a (near) real-time response. Another issue is the validation algorithms, with the high bitcoin mining energy requirements. Then there is interoperability and as with any IT system, security.

These are some of the reasons behind the formation of the Energy Web Foundation and its stated intent to provide “an open source, scalable blockchain platform specifically designed for the energy sector’s regulatory, operational and market needs.”

Founded by Austrian blockchain developer Grid Singularity and the US Rocky Mountain Institute, its membership support has grown from the 10 founding ‘affiliates’ to more than fifty to date. Notably among these are not only large utilities and energy companies but also leading startups.

Blockchain energy sector validators

Oriol Pujoldevall, Head of Business Development at the Energy Web Foundation, tells Engerati that the Foundation’s proposal is that the role of validation for an energy sector blockchain should be restricted to reputable players with their activities in the energy market.

To achieve this, the Foundation’s blockchain is built on ‘proof of authority’, rather than the standard ‘proof of work’ in which anyone can participate anonymously.

“We envision a paradigm of a public blockchain open to everyone but secured by known reputable authorities as cooperative energy market participants operating under the same set of rules, effectively making the design different to anything in the market,” says Pujoldevall. “In this way we can create a platform that is inclusive for all the players in the sector.”

These authorities are the affiliates of the Foundation who hold a stake in the platform. The goal is to increase the number of validators up to a number that ensures an appropriate level of security.

When operating the blockchain, validators will be randomly assigned the task of block signing, thereby sharing the risks/rewards as well as minimising the energy requirements to a negligible level.


Energy use cases

The first public deliverable from the Foundation was its application layer test network, codenamed Tobalaba, which was released in November 2017.

Subsequently, and in preparation for the formal live launch in June 2019, new features are being rolled out regularly, alongside the day-to-day testing that is being carried out between the affiliates.

Among these Pujoldevall mentions a privacy feature that encrypts smart contracts during the validation processes so that transaction information is provided only to named parties, such as regulators, but otherwise remains private. Another is web assembly integration enabling smart contract coding in C++.

“This will allow all software coders to become blockchain developers which will increase the workforce by multiple orders of magnitude,” he says.

Pujoldevall also mentions the development of open source application frameworks, on top of which third parties can build proprietary apps. The first of these now available, named Origin, records and tracks the source and ownership of energy injected into the grid, in order to provide transparency for renewable energy users.

Others frameworks under development are on electric vehicle charging and what he describes as “one of the most ambitious” for transactive energy. Named the ‘decentralised autonomous area agent’ (D3A), it is intended as a fully smart contract-based platform to enable energy settlements at different scales from local to national. Currently, D3A is at the stage of providing a simulation environment where grid configurations can be tested.

Open source blockchain

As an open source initiative, the Foundation’s blockchain is open to all parties, whether an affiliate or not. Startups with existing platforms – such as Electron, Share&Charge and Verv, which are now affiliates – can run these on top of the Foundation blockchain.

“Our aim is to materialise the value proposition of blockchain in the sector by providing a platform that can make it happen,” says Pujoldevall.

These include integrating PolkaDot for interconnecting chains and the Raiden network for off-chain payment channels among other features.

“All of these will contribute to improving the capacity and scalability of the blockchain.”