Joanna Hubbard's enthusiasm for the blockchain platform she is helping to pioneer is evident within minutes of meeting her.
Instead of offering a slightly disguised sale pinch for some technology, it makes a lucid and engaging discussion for a solution that firmly believes is the key to helping provide a successful decentralized energy market.
As co-founder and chief operating officer of the British company Electron, Joanna – or Jo-Jo as she likes to be known – has two a half year message that conveys the message that blockchain is the missing piece in the 21st puzzle century on decentralized energy.
And it is a message that has gained considerable traction: since its early days Electron has had the support of the British government, Siemens and the Japanese energy giant TEPCO, and this year has formed a blockchain consortium including Baringa, EDF Energy, Flexitricity, Kiwi Power, Northern Powergrid, Open Energi, Shell, Statkraft and UK power grids. Last year Electron was named by the World Economic Forum as one of the 30 most promising technology pioneers.
Hubbard's journey into blockchain began when he worked for the consulting firm McKinsey in his Digital Strategy Transformation team. He read that "blockchain 1.0" is the transfer of payments with bitcoins, cryptocurrencies, etc. And "blockchain 2.0" would be the regulation of contractual relations.
"And I had this moment of" Wow, that's what you need for decentralization of the energy industry, "he says.
She and her co-founder Paul Ellis worked on the concept, with the help of ex-power chief Paul Massara as "mentor and sounding board", and Electron was born. Since then, Massara has become the company's CEO.
Before entering into what is and is blockchain in the digital energy landscape, I ask Hubbard his definition of what exactly means "digitization" in a context of the energy sector.
"Digitization means many different things for a lot of different people," he says. "In the field of 4D energy [digitalization, decarbonization, decentralization and democratization] the digitization of energy refers to the collection of data.
" But for me, and for Electron and our attention, we are examining two key components: to physically represent digital assets in the system and we are looking at digitally representing the flows of these assets: trading and operational data. "
He says that as we move from a traditionally centralized energy system to one that is increasingly decentralized," suddenly that data becomes incredibly important: that ability to represent the system digitally. Because all the new business models that revolve around optimization, flexibility, energy services, tariffs … all rely on access to these fundamental data and optimization. "
So what's the blockchain? And why is it so often misunderstood – or even not understood at all?
" The reason why many people do not understand blockchain comes from the fact that people usually they do not explain the blockchain in the abstract – they are explaining a particular blockchain. So they are making statements like "the blockchain is transparent, the blockchain is opaque, the blockchain is safe, the blockchain is not secure, the blockchain is fast, the blockchain is slow". And they could all be true for "a blockchain", but they are not true for the blockchain in the abstract.
"Blockchain in the abstract is a technology, essentially a protocol, a set of rules, which is applied to all participants in a network.
" And when all the participants adhere to these rules, they are able to substantially update the network status and keep that network together.
"So in the energy space, blockchain is very exciting in terms of being this coordination mechanism."
He says in an increasingly decentralized energy world, "we need a new coordination mechanism that is able to apply a set of rules across all these different assets, which gives them access to a market in a controlled and rule-based way, which is why I think the energy industry is becoming very enthusiastic about this technology. "
Emphasizes that the blockchain in itself is not a business model:" It is a technology that enables much more granular business models and a much more active participation in
"What is almost misleading about the recent wave of press coverage is that blockchain does not necessarily allow new business models.
"Business models such as peer-to-peer or vehicle-to-grid are possible with a central intermediary, Blockchain allows them to do so without the central intermediary – which can improve cost-efficiency and even the trust function. "
Hubbard highlights decentralized energy as an aspect of the energy sector that is" particularly mature for coordination. "Coordination between potentially competing and potentially uncompetitive parties. Electron's main objective – the markets for flexibility
"There is a really exciting component of the trade in flexibility that currently does not exist on any exchange product.
"A single turn-over or reduction action from an end-user has multiple non-rival value components for different players in the energy market, so if I'm a battery and I take action of reduction, the net effect of the system balancing has a value for the operator of the system and could pay for it.The position of this action will have a net positive or negative effect for the distribution operator who is trying to manage the flows, the constraints and the resources, then it is able to give a price to this and it also has a value for a supplier because they are trying to balance their commercial position.
"And you could have people in that area that wants to reward that person to produce local energy or verdexsqeawudbsfavftyvttcuweur. "
So you say that while today only bilateral trade is possible," as soon as you introduce a layer of blockchain-trading, you can coordinate all the different and trading items. You can make sure that an asset receives the full value stack. "
Electron created two blockchain platforms: a resource registration platform and a trading platform.
" Our application is a business application that solves a problem many asset owners or suppliers of flexibility or aggregators want to solve, and participants from the other side who are buying this flexibility have not been allowed to resolve themselves. "
Hubbard says that the reason Electron had such a quick success" is because we did it with industry "
" Coordination is the key to achieving the full value of digitization . There are three main platforms that must be coordinated and shared. It is the resource register: what is it? dov & # 39; is; there is the trading platform and the rules on how you are allowed to interact; and then c & # 39; is the data repository.
"Everything else – all other competitive business models – can be built above that structure, but that infrastructure must exist first."
However, the key element that Hubbard emphasizes for the energy industry is that "you can start doing it in small pieces." You can build it as piecemeal as the market requires.
"With blockchain you can create a living and vibrant data set and you can decentralize the responsibility of keeping it up to date – keep it and correct it – and you have this perfect verifiable record of who changed the data, and how and when.
"Satisfy the governance functions you need for something similar to the national infrastructure."
Hubbard says the key to developing the blockchain platform is "about building something that is future-proof".
"We know that we need to build an infrastructure that allows greater participation of the assets in the system, because this creates more competition, increases the efficiency of the system and also increases the resilience of the system."
Electron focuses on the UK energy market but the company is attracting global interest in the adaptability of technology.
"Almost all countries with a developed renewable energy market are examining these issues," says Hubbard.
Jo-Jo Hubbard will speak at the European Utility Week in Vienna in November. Click here for details.