Blockchain Powers Solar Industry. Part 1/3

What can blockchain do and what distributed ledger technologies do already to solar energy industry?

In this article, I will examine the major blockchain use cases already in use or in development by large and medium size players in the solar energy industry. The most active players will have a separate section. I will then attempt to draw some conclusions.

However, here are the first findings: two trends are clearly visible in application of blockchain in the solar industry:

  • solar powered blockchain based microgrids
  • p2p trading related to solar energy

March 2019, Ikea‘s research and design lab launches a project to study how solar power can combine blockchain based technologies.

Copenhagen-based SPACE10, Ikea’s subsidiary, runs the SolarVille project in collaboration with blockchain experts BLOC and Blocktech.

Bas Van De Poel, creative director at SPACE10, said that the combination of solar cells and blockchain based decentralised microgrids will allow  SolarVille residents ‘leapfrog traditional grid electricity.’

The aim of IKEA’s SolarVille project is to create “the prototype for a realistic, scalable self-sufficient, community-driven solar microgrid, including a fully working energy trading platform enabled by blockchain technology”.

In May 2019, ABB, one of the world’s major producers of inverters used in virtually every solar installation, has partnered with Italian utility Evolvere to use blockchain technology, which allows for transparent and secure peer-to-peer energy transactions.

The firm disclosed the aim of the project somewhat loosely. According to the corp announcement, the pilot will see the combination of ABB inverters and the tech firm’s ABB Ability digital solution and is to explore how blockchain technologies and applications could transform the market for smart grids. 

Also, ABB said the use of blockchain-ready inverters could allow utilities, aggregators and energy companies to cut both Capex and Opex project costs, accelerating business cases for subsidy-free renewables. If successful, the firm intends to ensure that all inverters in the same class are blockchain ready.

Let’s talk first about linkage of blockchain to energy grids in solar installations, and what it may provide to consumers.

The idea behind energy grids linked to blockchain is fairly simple, by giving consumers total control over where they source their energy as well as the information behind the production itself it drives competition and promotes sustainable energy.

Though quite a few startups use this word and some demonstrate true progress in this area, however one of the first working examples of consumer driven smart grids may be found in Estonia, where a blockchain-powered smart grid called WePower conducted a successful pilot by  cooperation with an independent energy provider who shares the energy data in real time. 

Consumers had invested into the grid and been given credits to spend on specific energy sources, with a number of choices to be made, on prices in real-time power generation. 

WePower’s CEO Nick Martyniuk told Wired that “blockchain provides the necessary trust for data sharing and creates liquidity as well as accountability between energy buyers and producers.”

A similar project was announced this January in Japan, where 55,000 rooftops in Japan planned for peer-to-peer solar trading. This project is run by Australia-based Power Ledger, which runs blockchain based solar projects in Thailand, UK, Japan, and at home, in Australia.

Power Ledger installs blockchain-enabled software that provides for solar owners to trade or sell digital tokens. On the Power Ledger platform, the value of the energy traded is represented by tokenized representations (credits) called Sparkz, which are pegged to local currency.

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The Japanese Sharing Energy will use Power Ledger’s peer-to-peer platform to facilitate peer-to-peer trading using real-time data from existing smart meters. 

Power Ledger will verify the feasibility and scalability of P2P energy trading in Japan and allow Sharing Energy to conduct research on energy transactions via Power Ledger’s blockchain-powered platform

Another upcoming player in building microgrids based on blockchain technology a New York based LO3 Energy. The firm implements microgrids using renewable energy to power sectors in a social setup. They are piloting a microgrid in Brooklyn based on the blockchain technology.

The residents of Park Slope in Brooklyn, NY, with the solar panels sell their environmental credit to residents without solar panels via a phone app. The residents can then negotiate with each other on how much and at what price they want to buy the electricity.

This process eliminates the middleman and allows peer-to-peer exchange.

The entire setup is made possible by blockchain, which allows the smart meters to communicate with one another reliably and the app acting as a bidder that gives microgrid consumers the power to control transactions.

LO3 has identified several openings for blockchain based projects:

Local peer-to-peer energy market. Electric flows between prosumers and traditional providers, but blockchain platform can allow for placing bids and provide ownership to the one who won the bid of the locally produced renewable energy.

Localized Demand Response: Substation the risk of overloading can be managed cost effectively.

Location-based pricing: supply costs are not the big part, but the grid costs are the heavy part of the electricity cost. Buying directly from the supplier will make it cheaper for the customers.

LO3 runs several pilots worldwide (Australia, Germany) since 2017, and they have partnered with Siemens, KIT, AEMO, EPEX SPOT.

In Germany, the focus has been on developing regional mini-grids in order to capitalize on wholesale trading

Enerchain offers their services to energy traders who need trading data via platforms, data communication processes. The team behind the Project Enerchain boasts to have conducted the world’s first wholesale energy trade over the blockchain, it took place on 5th of November 2016. Over 30 partners (mostly big national utilities) test the blockchain.

These developments have encouraged a rapid rise in the number of community energy projects around the world, where households generate, store, and trade energy with each other.

In Scotland alone, the main community energy advice group lists over 300 projects that it supports.