Canadian energy efficiency specialist Kontrol Energy has launched bIOTAsphere, a Decentralized Ledger Technology (DLT) accelerator and commercialization facility, in a move to secure a foundational role in the energy blockchain ecosystem.
Looking to unite academia, government, and business groups, which are all looking to explore how ledger-based solutions could be deployed in the utility and smart building spaces, Kontrol would obviously like to play a central role in the bIOTAsphere’s strategy – as a means of boosting its own commercial success.
However, at these early stages, any growth in the market will be good news for the likes of Kontrol, so we don’t need to dive straight in with unfettered cynicism. “Realizing the full potential of DLT requires open partnerships within the technology community to accelerate and drive innovation,” said Paul Ghezzi, CEO of Kontrol Energy. “The bIOTAsphere will operate as a not-for-profit with various membership participation levels.”
The bIOTAsphere will, unsurprisingly, be using IOTA as the basis of its DLT. IOTA stands out because it uses a mathematical technique called a quantum-proof Directed Acyclic Graph (DAC), to create its IOTA Tangle – a blockless alternative to a blockchain. The DAC-based Tangle is the ledger, and it doesn’t require the huge mining resources of something like bitcoin – which are very energy intensive.
In terms of the network architecture, there is no distinction between an IOTA user and an IOTA validator (the miner, in the case of bitcoin), as both will be contributing to the network’s operation when using it. The IOTA Foundation says that the network will be faster as more participants use it, as the ledger’s validation is “an intrinsic property of using it.”
IOTA is an open-source project, initially designed to serve IoT applications through the IOTA data marketplace. Some 20 organizations have participated in the Foundation, including Accenture, Bosch, Deutsche Telekom, EY!, Fujitsu, and Philips, who are all looking to capitalize on the potential of the marketplace – and its ability to let IoT devices sell their data to buyers hungry for better information, to be used in their business processes.
For energy-related uses, a data marketplace would allow utilities to collect aggregate usage information that could help guide energy purchasing agreements. For equipment vendors, purchasing this data could help influence design choices, and also tie into marketing strategies. For things like cities or campuses, being able to sell the data collected by things like HVAC sensors or door controls could enable quicker RoI for IoT projects, or turn into lucrative revenue opportunities at sufficient scale – if the market supports it.
The bIOTAsphere itself will be based in Toronto, Canada, and will focus on North American development and opportunities. It appears that there are already some members, but they have not been publicly revealed yet. With tiers of membership levels, members commit to sharing their progress in IOTA for the use of other members, and assigning a liaison. Crucially, the bIOTAsphere is fully supported by the IoTA Foundation, from its HQ in Berlin.
Kontrol has been on our radar for a while now. Back in 2016, it bought Log-One for its Energy Management System (EMS) for connected buildings, a fellow Canadian company that had deployed around 10,000 units – which are centered around an occupancy sensing thermostat that can be integrated with HVAC systems. That EMS system had managed between 24% to 33% savings in multi-residential buildings, and 30% to 40% in classrooms and offices.
In November 2017, Kontrol launched the blockchain-powered Kontrol EMS, aimed at utilities looking to embrace Distributed Energy Resources (DERs), like solar and wind. Kontrol says it offers users the ability to manage their localized DERs, and use learning algorithms to do this with some level of intelligence and automation. It also enables local energy producers and consumers to trade in a peer-to-peer fashion, and Kontrol expects to build out around 2MW of DER in Ontario, Canada. Kontrol noted that it was exploring opportunities in New York and California too.
Kontrol then acquired an unnamed strategic blockchain software firm at the beginning of February 2018, which provided SaaS and had revenues of around $6m – and EBITDA of $1.2m. The purchase price was $14.25m, which gave Kontrol control of an IOTA specialist that is developing its own tokenized crypto platform based on IOTA – paving the way for the launch of the bIOTAsphere project at the end of the month.
As for results, Kontrol claims to save its customers around $5m in annual energy costs annually, amounting to 30m kWh saved and 1,000 tons of CO2 emissions. It offers a number of approaches for customers, including retrofits, DER installations, and analytics systems, aimed at utilities, manufacturers, industrial, commercial buildings, and MDU buildings.