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Around 2016, the energy world was abuzz with the possibilities blockchain could bring to the energy sector. The promise of safe, secure and traceable transactions that did not require an intermediary to allow them … Peer-to-peer trading seemed within every man’s reach and we were just months away from a new energy dynamic.
And then the blockchain seemed to fade into the background, to be replaced by a new password and the promise of a new Holy Grail. Has the blockchain had its moment of glory or is there still some life in turmoil from a few years ago?
It depends on who you ask, but we decided to explore the landscape and give some perspectives for you to consider.
This article was originally published in Smart Energy International, issue 5-2020.
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A recent Bloomberg article reported that at the Invest: NYC conference: “Blockchain, the underlying technology that powers cryptocurrencies including Bitcoin, is getting its latest rites read.”
According to Meltem Demirors, CoinShares Group’s chief investment officer: “Blockchain is dead. After two, three years of spending a lot of money on it and a lot of investment dollars on it, I think the bigger question as an investor is: what is the scalable revenue model and is there equity value created in these businesses? And probably the answer is: not yet. ”
“Most of the companies that raised huge amounts of capital in 2016, 2017 to create blockchains no longer exist or have turned to cryptocurrency and tokenization,” he said.
CB Insights shares that blockchain’s decline has been evident for a few years, arguing that blockchain investments in 2020 will likely be around $ 1.6 billion this year, down from a record $ 4.1 billion in 2018.
However, not everyone agrees with the assessment that blockchain has seen its day.
Mike Alfred, co-founder and CEO of Digital Assets Data: “Enterprise blockchain, this idea that every business will want to have a blockchain, that idea may be temporarily on the ropes, but blockchain is the foundation of what makes the business work. whole ecosystem. The Bitcoin blockchain has been running for over 10 years without interruption. In no way is it dead, “he said.
BLOCKCHAIN, THE UNDERLYING TECHNOLOGY THAT ENHANCES CRYPTOCURRENCIES INCLUDING BITCOIN, IS READING ITS LATEST RITES …
“… It seems that a lot of people are tired because we have been in this space and everyone is waiting for the space to grow and for good things to happen. And it just takes longer than most people expected, but that in no way means that space is dead. “
Hassan Bassiri, a portfolio manager at Los Angeles-based asset manager Arca, shares: “In 2017 and 2018 during boom boom cycles, everyone thought blockchain would be the answer to just about everything in terms of technological innovation. asset issuance, trading, supply chain, insurance, everything. And slowly what people are starting to realize is that blockchains are basically public ledgers and it is not an efficient system. In reality, there are very few things that belong to a blockchain. Anything that requires efficiency or speed of operation probably does not belong to the blockchain. And it is cryptographic, so everything goes through a hype cycle and sometimes we put the cart before the horse. “
Don’t clear the blockchain yet
According to the Energy Web Foundation, however, blockchain has had a good year!
They recently announced a partnership with Fohat to develop a renewable energy trading platform for AES Tietê. Using Energy Web Origin, the platform will integrate the Fohat – AES Tietê platform with the issuance, monitoring and communication of international renewable energy certificates (I-REC) in the Brazilian market based on its existing collaboration with the I-REC standard .
Energy Web Origin is a portfolio of opensource software development toolkits to help companies create digital solutions for renewable energy supply markets.
According to the Energy Web Foundation, in Brazil, there are various barriers to trading I-REC due to the lack of liquidity and transparency. This results in various complex costs and processes for sellers and buyers to do business with each other as the transaction costs are high for both feed and I-REC.
This electricity trading platform and I-REC will meet the needs of the energy sector: electricity generation companies will be able to trade certified raw materials directly with buyers in a transparent, lean and reliable way through this blockchain-based digitized platform.
The platform will therefore help buyers, especially multinationals, meet their environmental impact test and related reporting needs.
This solution will have a profound impact on Brazil’s deregulated electricity market, where in 2019 around $ 26 billion in energy contracts and around 3 million I-RECs went through the free energy market (Ambiente de Contratação Livre or ACL) – an increase of 110% compared to 2018. Brazil is the second largest I-REC market (behind China, the largest I-REC market). In fact, Brazil’s free market currently accounts for 30% of the country’s electricity consumption and is set to grow gradually, reaching 100% over the next decade.
The integration of all aspects of the solution and the actors involved, as well as software development, is Fohat’s role in the project. AES Tietê intends to use the platform to settle both energy contracts and I-REC.
Other developments
Energy Web has announced further collaborations with Foton, an energy transition startup to launch a one-of-a-kind commercial pilot project for trading renewable energy in Turkey; and with Mercados Eléctricos SA de CV (MERELEC), an electricity retailer operating in Mexico and Central America. Merelec and Energy Web announced the completion of the first phase of development of a digital platform for the renewable energy market for Central American I-REC markets earlier this year.
Further accelerating the work done in Central and South America, Energy Web will partner with Uruguay’s network operator, Administración Nacional de Usinas y Trasmisiones Eléctricas (UTE) to pursue blockchain-based solutions that will enable UTE to innovate and evolve under a variety of potential future scenarios.
The solutions to be developed will leverage the Energy Web decentralized operating system (EW-DOS), including the Web Energy chain, as well as the EW Origin and EW Flex software development toolkits. As part of the partnership, UTE will become a member of Energy Web and host an EW chain validation node.
Internationally, Energy Web and communications company Vodafone Business will provide energy assets with secure digital IDs and monitor their use and connections within energy grids. They will combine SIM-centric (SCB) blockchain technology with Internet-of-Things (IoT) technology.
Vodafone Business is Energy Web’s first telecommunications partner. The project aims to improve the integration of energy assets, such as turbines and solar panels, using IoT connectivity and blockchain, in particular SCB technology. This new SIM-centric technology will provide energy assets with secure digital IDs, which means energy grid stakeholders can identify, monitor, validate and manage equipment and energy assets within smart grids.
The ability to identify and validate distributed generation assets in the smart grid is essential to maintaining its stability.
Vodafone already provides smart metering and smart grid solutions to the energy sector.
Erik Brenneis, IoT director of Vodafone Business, says: “As the number of decentralized, next-generation, low-carbon devices increases, so does the need for them to be securely connected regardless of their location.” Walter Kok, CEO of Energy Web, adds “from our point of view, the energy sector can only evolve so fast and so far without taking IoT connectivity into account.”
Kok, commenting on the ease of use of SIM technology to identify and connect devices, told CoinDesk: “We can connect via [the SIM], we don’t have to do anything, just download the software from Voda, it is connected to the chain and has its own identity; because that’s the beauty. ”
