One big challenge for the renewable energy sector today is the traceability or identification of the generating asset power stream. Blockchain based renewable energy certificates allow for this problem to be solved.
As the trend of becoming a prosumer accelerates (by installing a small solar PV plant on one’s roof, a small hydropower plant at the creek next to one’s houses, and so on), the energy market will become more granular resulting in a positive correlation with this traceability challenge.
Not only are prosumers driving the energy market revolution. So, too, are large enterprises that are investing big money in renewable energy. While many energy brokers or organizations claim to trade to a large extent or exclusively with renewable energy sources, clear proof of that claim still cannot be produced.
Energy Web Chain (EWC) claims to have found a solution to this complex problem and breaks it down to one concept – Blockchain.
In short, the inability to trace where your power comes from is due to laws of physics, which do not distinguish between electrons from renewable energy sources and electrons from fossil fuels. Another factor is the absence of a smart grid to find ways around these physical laws and tackle the traceability issue from a different angle. Such a smart grid will be inevitable following the renewable revolution and the steady development of microgrids to supplement the bulk power grid.
As a consumer, it surely helps to buy power from energy brokers who promote renewable energy and offer premium tariffs that are mainly composed of renewables. However, a slight bland taste still may remain.
The Energy Web Foundation (EWF), a not-for-profit organization, came up with a solution to the energy origination problem, called Origin.
The easiest way to describe the functionality of this year-old platform is to imagine the CO2 certificate market and mirror its process but in the opposite direction by accrediting renewable energy generation with certificates. In practice, that means that every generating renewable energy asset linked to the energy web chain is awarded Energy Attribute Certificates—EACs–equal to the amount of generated power.
EACs include (i) the source of the power (solar, wind, hydro, etc.), (ii) the geographic region of the generating asset, (iii) the exact amount of electricity generated and (iv) the date and time. The renewable energy certificates can be traded on a blockchain-based credit market, and done so more efficiently than all other vastly manual driven projects that currently are available. Blockchain trading allows for further automatic add-ons like kilowatthour mapping of carbon offsets. The blockchain is used only for what it is best at: enabling trust between two machines that are communicating and processing transactional data instantaneously. On top of the blockchain layer, many other decentralized IoT applications are developed to enable the functioning of the Energy Web Chain.
The EWF illustrates the renewable energy purchasing process in a way that is much like buying an airline ticket—buyers search for precisely what they want and sellers offer options to get that buyer to their desired destination.
“By digitizing identities, records, ownership, and contracts, blockchain can make renewable energy purchasing transparent, highly functional, and low cost.” – The Energy Web Chain: Accelerating the Energy Transition with an Open-Source, Decentralized Blockchain Platform. Energy Web Foundation. July 2019 (version 2.0)
Through the user-friendly and transparent platform, large enterprises will be able to prove with a single click their progress in achieving environmental goals in order to fulfil ISO, EMAS, and other auditing requirements. The energy sector thus becomes more open to the direct purchase of power from nearby generating assets, the use of BEV as storage/power facilities and other value-creating applications.
EWF set a goal to engage collaborations with at least 10 enterprises before launching the platform. They succeeded and gained some impressive partners and affiliates all over the globe, including Vodafone, Tesla, engie, Shell, eon, Siemens and others.
As with many blockchain-based applications, the EWF also features a native first-layer utility-token called the Energy Web Token. This maintains both security and validator compensation via transaction fees and/or block validation awards.
Do you believe the energy sector is rapidly heading towards a turning point in need of smart-grid adoptions?