Blockchain based electricity management pilot coming to Europe

Three major energy companies in Europe, including the leading central European electricity Transmission System Operator (TSO), TenneT, have announced that they are working with IBM on blockchain solutions for managing electricity.

The TSO says that they will be testing the blockchain-based approach on in pilot projects with Vandebron in the Netherlands, and the the sonnen Group in Germany.

“These pilot projects are part of TenneT’s broader strategy of preparing the electricity system to accommodate the growing volume of renewable energy.”
— – Mel Kroon, CEO, TenneT

The blockchain framework is being deployed using Hyperledger Fabric, an open source implementation and one of the eight Hyperledger projects hosted by The Linux Foundation. In TenneT’s case, it is being deployed specifically to enable “decentralized flexible energy sources to play a role in the management of the electricity grid,” according to the company.

TenneT is a Dutch government-owned, electricity TSO with lines to several countries in the region, but is mainly active in the Netherlands and Germany. The company claims to supply electricity to over 41 million customers, and employs approximately 3,000 people.

The company states that renewable electricity generation accounts for a growing share of their customer’s overall power supply, and that this growth is making the electricity grid become more volatile. The grid may fail to meet demand in the coming years, TenneT warns, and the TSO has been searching for new ways to maintain supply security.

To guarantee a continuous supply of electricity to all of TenneT’s customers, supply and demand must be constantly balanced. The company makes sure additional electricity is supplied when needed, or deploys reserve capacity from other sources.

“TenneT is exploring the use of a permissioned blockchain network that uses Hyperledger Fabric to integrate flexible capacity supplied by electric cars and household batteries into the electrical grid.”
— – TenneT

TenneT will be working with with Vandebron, a three-year-old, Amsterdam-based energy supplier that produces 100% renewable energy from wind, solar, and biomass. The startup already claims over 100,000 customers, who are supplied with power from more than 120 local sources.

Vandebron has customers with electric vehicles, who can make energy stored in their car’s batteries available when TenneT needs to balance the grid. Vandebron will be crediting those vehicle owners for the power it buys, and even says that it will be able to grab this energy from their customers without compromising the availability of their car battery when it needs to be used. The pilot’s blockchain will be keeping track of availability and energy credits for each car.

Joining the two companies is Germany’s Sonnen GmbH, which produces home energy storage systems for homes and small businesses, comparable to the Tesla Powerwall. The Group is ranked 28th on the Top 50 Smartest Companies for 2016 by the Massachusetts Institute of Technology, alongside Tesla and Amazon.

Sonnen claims to supply over 60,000 people globally with clean energy. Sonnen’s network of residential solar batteries will be made available too, in order to help fill capacity. The company says that the blockchain presents the TenneT operators with a view of their availability, and the ability to activate sonnen-sourced power at the push of a button.

The company is also at the center of an online community for homeowners and small business owners who generate their own power, called the sonnenCommunity. These enterprising customers are mostly owners of solar arrays and wind turbines, and share surplus power with one another. Sonnen has been using a blockchain to track the shared power among the 3,000 or so community members. “Based on the blockchain idea, the sonnenCommunity is an online network for sharing self-generated power,” the company states.

“As a sonnenCommunity member you don’t need your conventional energy provider anymore – you are independent. From now on you supply yourself with renewable energy that is generated decentralized: you are part of the energy future!”
— – sonnenCommunity

The collaboration comes in the wake of news that nearby Austria’s largest utility conglomerate, Wien Energie, taking part in their own blockchain trial focused on energy trading.

The energy company partnered with the UK’s BTL, and will use its Interbit blockchain technology for the pilot, which is running now but is expected to be completed later this month. Global consultancy firm EY is also offering support for the test, after which further commercial strategies will be assessed, the company explained.

“Through different experimental arrangements with the technology, new insights into the use of blockchain in the energy business are to be gained and possible process optimization and cost savings are to be explored,” said Peter Gönitzer, Wien Energie Managing Director.

At the consumer end of the spectrum, German auto engineering firm ZF Friedrichshafen AG, along with Swiss banking giant UBS and the innogy Innovation Hub announced in January that they have built a blockchain-based automobile “eWallet,” and are currently field-testing a car that keeps track of micropayments for energy credits as it drives.

The car’s use of Blockchain technology, the partners noted at the time, would help reallocate power from where it’s cheaper to where it’s needed far more efficiently than conventional power systems today. “The car could also provision energy back to the power supply system if authorized by the user to fulfill such demand,” states the announcement.

However, Power Ledger became the first company to use a blockchain for tracking energy credits in the Australian city of Perth, in August 2016. The company uses a customized “permissioned hybrid blockchain,” designed and developed in Australia by Ledger Assets. The system uses Proof-of-Stake mining for security and energy costs, as well as powering its miners with solar power, “making it the world’s most eco friendly and sustainable blockchain,” the startup claims.