Energy Industry and Blockchain – Is Siemens the tipping point?
Siemens has just made a foray into the world of blockchain technology. In a press release on November 21st, the company announced that currently, two of its energy divisions, Energy Management and Power Generation Services will be partnering with Energy Web Foundation’s (EWB) open source blockchain.
The press release also noted that Siemens is already using blockchain technology with microgrid applications.
The company noted that “By combining microgrid control solutions and blockchain technology, operators of photovoltaic systems can, for example, feed excess electricity into the existing local grid and receive their compensation directly from the customers, i.e. their neighbors. To further develop this technology and the new business models based on it, Siemens is collaborating with New York start-up LO3 Energy in the areas of innovative microgrids and peer-to-peer energy trading platforms and is currently implementing its first project in Brooklyn.”
The energy industry has also seen some test projects with blockchain technology earlier. The Singaporean utility company SP group launched a blockchain marketplace to trade solar energy. South Korea’s largest power provider KEPCO is using blockchain along with other innovative solutions to develop eco-friendly microgrids. French energy giant Engie announced collaborations with Maltem, IOTA, Ledger to develop various innovative solutions for energy industry, etc.
Most enterprises don’t seem to trust the completely decentralised, open blockchain environments like Ethereum. Permissioned blockchain with a variety of industry players coming together seems to be the preferred way for enterprises to adopt blockchain as they do not want to lose complete control over their data while making it easier, efficient and transparent to transact between various industry players. The trend was started by R3 which was the consortium for major financial companies in the world developing Corda, a blockchain focusing on the financial services industry.
EWB takes the same idea forward for the energy industry. It is a non-profit organisation founded by the Rocky Mountain Institute and Grid Singularity, a blockchain development startup focusing on the energy sector. It has growing membership landscape of corporate affliates like Duke energy, Engie, E-on, PTT group, Shell, SB Energy, Swiss Power, etc as well as technology providers like AppliedBlockchain, Brainbot Technologies, slock.it, nakamo.to and many others. It plans to have 200 participants online by 2019.
It aims to develop a new blockchain platform EW Chain and launch it by summer 2019. EW Chain is based on the Ethereum stack but uses ‘Proof-of-Authority’ consensus protocol as opposed to the more popular ‘Proof-of-Work’. This would help in the platform to be much more energy efficient and scalable. EWB claims that it would have 30x performance improvement and 2-3 orders of magnitude lower energy consumption compared to Ethereum. The platform would be open for all allowing participation of new startups but would be more centralised with the major participating players having more control.
Siemens claims that, “As part of the EWF organisation, Siemens aims to proactively shape the future of blockchain-based, transactive energy applications, new prosumer-centric use cases as well as business models around operation of distributed energy systems, microgrids and financing. Transactive energy applications will be a major force in the transformation of the energy sector towards decentralised, decarbonised and digitised energy systems, where distributed energy resources (DERs) such as solar, wind, stationary storage systems, electric vehicles, heat pumps and others as well as flexible loads are playing an ever increasing role.”
The news of Siemens joining the Energy Web Foundation platform is important. If successful, EWB could have a huge impact in the energy transaction mechanism to make truly smart grids. As the cryptocurrencies market increasingly suffer with bankruptcies aplenty, enterprise adoption of the blockchain will hopefully give the technology its due while the crypto world continues to receives its reality check.
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