The digitization of the electricity sector marks the second energy revolution, according to Joanna Hubbard of the electron blockchain company.
"If the first energy revolution were clean energy, the second energy revolution is a shared data structure that anyone can build," he told me in an interview.
"I see that it will happen over the next three to five years and will completely change the energy market and the entire supply-consumer relationship".
He added: "What's exciting for digitizing energy now is that it's a foregone conclusion – I do not think it was true a year ago – it's a huge amount of work going on. "
And she says that in 2019 "we will see an even greater fracture of the energy markets and we will see so many new ideas of things that we can exchange, not least the energy and network services, but also the data, many and many pockets of innovation".
Hubbard is chief operating officer and co-founder of Electron, based in the UK, which has already received government support and support from several key players in the energy sector including EDF Energy, Statkraft and TEPCO for its trading platform decentralized energy.
He says that "there are many different flavors of blockchain: many different cases of use.The main advantages for me are the transparency of prices in the markets – and I say" markets "because there will not be a market for all energies as we have today: there will be a market for network services, local energy, clean energy, great energy – so the blockchain can provide the level of coordination for all those different flows of value that move one above the other instead of one against the other. "
Hubbard states that "the reason why many people do not understand blockchain comes from the fact that it is usually explained as a particular blockchain".
"People make such statements", the blockchain is transparent; the blockchain is opaque; blockchain is safe; blockchain is not safe; blockchain is fast; blockchain is slow – and could all be true for & # 39; blockchain & # 39 ;, but they are not true for the blockchain in the abstract.
"Blockchain in the abstract is a technology: essentially, it is a protocol, a set of rules, which is applied to all the participants in a network, and when all the participants adhere to these rules, they are able to substantially update the status network 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 enforce a set of rules across all these different assets, which gives them the ability to access a market in a controlled and based on rules, which is why I think the energy industry is becoming very enthusiastic about this technology. "
It emphasizes that the blockchain itself is not a business model: "It is a technology that enables much more granular business models and greater asset participation in the energy sector.
"What is almost misleading about the recent wave of press coverage is that the 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 they do it without the central intermediary – which can improve the cost efficiency function and also the trust function ".
It highlights decentralized energy as an aspect of the energy sector that is "particularly mature for coordination: coordination between potentially competing and potentially uncompetitive parts" and this is Electron's main objective: the markets for flexibility .
"There is a really exciting component of the business of flexibility that does not currently exist on any of the exchange products.
"Our application is a business application that solves a problem that many resource 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 ".
"Coordination is the key to achieving the full value of digitization.There are three main platforms that need to be coordinated and shared.It is the resource register: so what is it? Ow & c ;, is the platform trading and the rules on how you are allowed to interact, and then there is the data repository.
"Everything else – all other competitive business models – can be built on that structure, but the infrastructure must first exist".
Hubbard says that the key to developing the blockchain platform is "on building something that is future-proof." We know we need to build an infrastructure that allows greater asset participation in the system, because this creates more competition, it increases the efficiency of the system and also increases the system's ability to recover. "
Jo-Jo Hubbard will speak at the DistribuTECH conference and exhibition in New Orleans next month. Click here for details. And co-located with DistribuTECH is the Energy Blockchain Symposium and Workout event.
Watch our series of exclusive interviews with Jo-Jo Hubbard.
