Energy Blockchain Consortium (EBC or The Consortium) has identified opportunities and challenges (also known as use cases) for ISO/RTOs to consider as possible areas to apply blockchain technology.
Blockchain enables development of applications with or without contracts and with or without any cryptocurrency. Not every application needs to provision buying or selling of products, digital assets or services. For example, some applications can secure data, optimize supply chain, reconcile financial transactions, report anomalies, provide compliance reports, manage assets, enable usage, or merely provide simple registration. Applications that implement contracts enable stakeholders to buy, sell or exchange assets and services based upon a pre-defined contract. Examples include buying or selling of an online product or service, company procurement of office supplies, spending management, selling a real estate property, enabling suppliers and buyers in a supply chain. Blockchain’s Smart Contract capability can be used to develop any application irrespective of whether there is a ‘legal’ contract to be implemented. Additionally, all use cases identified in this document do not require or depend on any cryptocurrency.
In its simpler form, a Blockchain Smart Contract is a computer program that implements a simple business logic to process a non-monetary business process. For example, verifying a user or a digital asset’s existence and authenticity. On the other extreme, Blockchain Smart Contract could be used to implement a sophisticated settlement and payment distribution system.
EBC has identified 16 categories of use cases for ISOs/RTOs that have been grouped into near-term and long-term opportunities. The former is a set of near-term opportunities that ISOs could consider whereas the latter are related to longer-term opportunities for ISOs. Intentionally, we have not provided any hard definition of near-term or long-term timeframes, as both terms are relative for each ISO. However, near-term generally refers to the first set of opportunities that each ISO should consider, by establishing their own priorities and timelines. Each category of use case can have a few sub categories of use cases. Overall this catalog provides about 50 such use cases grouped under 16 categories as significant opportunities for ISOs to customize the use of Blockchain to meet their individual needs. We do however anticipate that in CY 2020, each ISO will embark on at-least one or two such near-term opportunities using Blockchain technology. We also anticipate that many of the use cases identified in this catalog will be customized to support each ISO’s individual needs.
The Electricity Industry is going through a rapid transformation. The stability and reliability of current Energy Market and the Electric Grid is under threat with decentralization, decarbonization and democratization of the electric industry. The transformation also provides an opportunity to improve our electric infrastructure, improve security, improve renewable portfolios, and reduce cost.
The rise of distributed generation (solar, wind, biomass, cogeneration etc.) combined with affordable storage is starting to reduce dependency on central generators that are often fossil-based. Central generators – including those from renewable sources – have traditionally been a reliable source of electricity supply in the energy market and a provider of predictable capacity to the grid. With the rise of distributed generators and storage and other technologies collectively referred to as Distributed Energy Resources (DER), business models are starting to evolve from a handful of reliable, well known, high capacity and centralized generation sources to a myriad of distributed generation sources that are distributed, intermittent and with varying asset capacities. It’s axiomatic that decentralization is good, but decentralization of energy assets will initially lower stability and reliability, resulting in increased grid complexity.
This transformation also provides opportunities. The proximity of the distributed generation and storage to the consumer load will reduce infrastructure cost. The potential to accelerate the reduction of carbon footprint could generate a wave of opportunities for renewable energy that is driven by consumer demand. To realize these opportunities, legacy retail and wholesale markets will need to adapt and distributed generation owners and aggregators can choose to become active participants in these markets. The traditional transmission and distribution models will also change. Trends such as consumers becoming producers (prosumers), peer-to-peer trading, affordability of electric vehicles and storage batteries will create new opportunities in the retail market that will impact the wholesale market will evolve.
Over time, efficient operation or evolution of the retail and wholesale markets will foster alignment of energy prices with the supply and demand of electricity with real-time grid controls, grid balancing and real-time transactions. Eventually in the long term, a true Transactive energy grid and market will evolve.
Most of the Power Equipment Manufacturers and their customers have a lot to gain with Blockchain. At the very least, Blockchain, like the Internet is about to become ubiquitous. Like the internet your solutions will need to support Blockchain or at a minimum your solutions will need to operate on a Blockchain. Either way, Blockchain will be an enabler that will enable equipment manufacturers to deliver more capabilities and more functionality, at a reduced cost and optimized cost. Here are 18 use cases where Blockchain can be applied by Power equipment manufacturers:
Improve Internal Operations – Use Blockchain to improve supply chain, track parts and assets, and streamlining industrial processes.
Improve Quality Control and Independent Measurement & Verification – Provide a verifiable and auditable log of test data related to quality and to provide transparency to customers and regulators about quality of equipment and test results.
End to end Parts Traceability – For guaranteeing customers that you are using authentic parts by creating a digital ID that authenticates and document the origin of parts.
Reduce Liability issues – Issues related to moving parts and components from one place to another can be reduced. Any tampering, damage and lost parts can be avoided.
Deliver chain of Custody – Provide tamper proof chain of custody.
Ensure Compliance — Provide complete records for auditing and regulatory compliance purposes.
Manage 360 degrees Asset Life-cycle management – Enable your customers (Utilities etc), to manage, track and govern the overall lifecycle of assets.
Improved Customer Service with Condition based asset management.
Perform proactive asset management – with reduced downtime by ordering replacement parts prior to failure.
Smart Grid and Power Digitization – Leverage data produced by AMI/AMR Smart Metering to deliver next generation of customer services including improved Outage Management and reduce aggregated technical and commercial (AT&C) losses.
Transactive Energy – Integrate Wholesale market with Distribution Utilities to deliver customers with calibrated price signals so customers can optimize their energy consumption and get more choices.
Energy Conservation – Improve Energy conservation measures that improve energy efficiency in buildings and commercial customers including ensuring that there is traceability and verification of adherence to energy conservation building codes.
Harness the data – Unlock the data produced by millions and billions of IoT devices.
Solve Tech Challenges – With the emergence of IoT devices, Analytics, AI, Robotics, and upcoming 5G, there is an opportunity to leverage Blockchain in integrating these technologies across a single platform that becomes the basis for next generation of services and solutions.
Prosumers and DER Integration – Enable the next generation of prosumers who are both producers and consumers of electricity. Facilitate the integration of DERs on demand.
Provide behind the meter visibility to Utilities who are traditionally ‘blind’ to behind the meter equipment.
Connected Home – Blockchain can be used to integrate the connected home with the main grid. This integration will complete the loop with an otherwise disconnected consumer and their home.
Energy Management – Blockchain can be used to manage energy data, for benchmarking and for compliance reporting.
Blockchain Technology is akin to the “swiss army knife” that can be applied in many ways to many Energy problems and transactions. The Consortium will apply Blockchain technology responsibly, economically and effectively in a fair and equitable manner to protect the interest of Energy Companies, Consumers and Regulators while developing innovative business models for the future. The Consortium will identify and prioritize the right opportunities for members and provide a pragmatic path to piloting and commercialization. The key value propositions and benefits are as follows:
Reduce Business Risk and Accelerate Time to Market through Collaboration: A collaborative and pooled approach to Research and Development, combined with iterative learnings from pilots will provide the pathway to commercialization at lower risk, lower cost and faster time to market.
Pooled approach accelerates execution, lowers cost and delivers faster services;
Participate and learn from Pilots without risking too much capital and resources.
Reduce Technology Risk by driving Open Architecture and Standards: Drive an open and standard architecture to reduce technical risk, more competition & reduce prices.
Develop standards with a peer community and de-risk your investments for years;
Introduction to Blockchain Webinar: The Energy Industry is going through a transformation for a decade and the Utilities and Oil & Gas companies have been following a predictable path to SmartGrid and Digital enablement. This steady pace has recently been rocked by a radically new technology whose potential and pace of adoption has surprised even the harshest of critiques. Every industry is gearing up to adopt it in one way or another. Blockchain technology broke into the market just a few years ago with its iconic application – Bitcoin, a cryptocurrency whose jaw-dropping rise both puzzled and intrigued the general population. Ardent support led to its fierce but volatile rise. Since its inception, this esoteric cryptocurrency continues to reshape the global financial markets. Blockchain, the less-understood albeit foundational technology powering Bitcoin, is the real technological game changer, an innovation in some ways as radical as the Internet itself. It provides an opportunity to reshape the Digital economy, empower consumers and secure the leaky digital world.