Utility blockchain could have its year, as WePower and Elering launch pilot

The past year has seen a steady trickle of blockchain-based experiments from utilities, embracing startups exploring the technology to see how they can use the ledger system to better embrace renewable energy sources. However, the past year also saw bitcoin suffer a crash, which will likely put many investors on edge – those who don’t really understand what’s going on. However, 2018 is shaping up to be the year in which some major progress is made on the utility blockchain front – and two deals have caught our eye this week.

Kontrol Energy used the pre-CES lull to announce that it had acquired an energy analytics company for $1m – but neglected to mention who it had actually bought. Saying that the company had over 10 years’ experience, and was currently installed in 120 building (12m square-feet of real estate), Kontrol CEO Paul Ghezzi declared “the target acquisition will facilitate our growth in energy analytics and provide us with access to an existing customer base that aligns with our blockchain technology strategy.”

Crunchbase’s database suggested that it couldn’t be LO3, a company Riot has previously covered, as LO3 was founded in 2012. As LO3 were the only company that really sprang to mind, a further dig around the list didn’t turn up anyone that really fit the bill for Kontrol’s target. Green Power Labs could be a candidate, founded in 2004. But while the identity of the target may remain a secret for the time-being, it is indicative of the interest that utilities and energy providers have in blockchain.

Elering and WePower are great examples of this excitement, with Estonian gas and electricity system operator partnering with the blockchain-based energy trading platform, in order to trial a European-first – the large-scale tokenization of energy data and trades in Estonia. The next step of the trial would see green energy producers connected to the Estonian smart grid.

As part of the test, WePower will be integrating its trading platform into Elering’s Estfeed data platform, to add its blockchain-based contract tech that will power the trades. The pair are hoping to make the most of Estonia’s national smart meter coverage, which currently provides hourly updates inside a centralized data hub. As with nearly all renewable energy integrations, Advanced Metering Infrastructure (AMI) is a prerequisite.

We are thrilled to announce our partnership with Elering AS,” said Nick Martyniuk, Co-Founder and CEO of WePower. “It is the first step in our goals of making the smart grid greener. Estonia is the perfect country to start with, as it already has an existing advanced smart grid infrastructure that we can integrate our technology into. This partnership is an excellent use-case to show the viability of blockchain technology in the green energy space, and marks a huge achievement towards creating a global blockchain powered energy trading network.”

This project is a departure from previous utility blockchain tests – where the distributed and immutable public ledger (record of transactions) helps to provide trust between the third parties that are trading energy. With the LO3-Consensys project, a blockchain was used to ensure that neighbors could monitor the trades between rooftop solar panels and homes.

The WePower-Elering test is similar, but at a much larger scale – using a ledger to monitor trades between grids rather than buildings. In addition, WePower is providing a ‘smart contract’ system – a term that is inextricable from the Ethereum project, in cryptocurrency circles, and one we explored with Monax.

Ethereum has had a shaky start as a currency, but the smart contracts garnered a lot of interest – and was used in the LO3-Consensys pilot, which later drew the attention of Siemens. They offer a way of automating transactions between parties, which can be tied into business processes or outcomes – paying couriers on receipt of goods, in a logistics use case, or paying for electricity from a wind farm, in a more related example.

What the pair hope to create is a grid-scale proof of concept for Estonia that could be expanded to the rest of Europe – helping to accommodate the disruptive nature of renewable energy production on utilities and their grids. Also active in Europe was a test between EON and Enel, which traded energy over a blockchain network built by Ponton, which was shortly followed by blockchain developer Conjoule securing $5.3m in funding from Tepco, in July 2017.

Tepco also began a distributed energy resource (DER) integration pilot in Japan, to see if it could better integrate renewables into its national grids in Japan, in May 2017, and in that same month, Dutch utility Tennet partnered with IBM and Sonnen Battery in a similar project. Tepco founded the Energy Web Foundation, to further blockchain tech in energy markets.

In Korea in October 2017, Shanghai-based startup Energo began building a Distributed Autonomous Energy (DAE) community, using its own smart meters and a smartphone app – hoping to leverage South Korea’s position as one of the fastest growing solar markets in the world. Energo’s implementation is built upon Qtum, a modified version of Bitcoin Core Infrastructure, combined with a version of Ethereum Virtual Machine.