Blockchain
Blockchain is an innovation for creating distributed trust between users and facilitating value exchange over a network, also seen as a decentralised append-only database operated collectively by participants in the network. Participants can be from different organisations that provide computing infrastructure to maintain a single version of a decentralised ledger. The blockchain protocol allows each participant to locally keep a copy of the same version of this ledger in their environment and agree upon any updates or changes to its state by employing some consensus algorithms. The blockchain enables distributed trust throughout the network without needing a central intermediary.
The decentralised trust allows blockchain technology to be transparent, secure, auditable, redundant, and immutable. Since each participant maintains the exact version of the “truth,” it removes the potential of conflict. Additionally, it also enhances the trust of end-users using blockchain-based applications, as they can confirm operations on their data from multiple distinct entities rather than a single centralised party. These features of blockchain have led to its adoption not only in the financial sector but also in health, energy, IoT, supply chain, and smart cities.
Smart Contracts
Smart contracts are the next iteration on blockchains, enveloping transactions in a computer code that emulates the logic of contractual clauses. Smart contracts can exchange money, property, data, shares, or anything of value in a transparent and conflict-free way, without the need of a middleman, government agency, bank, lawyer, or a notary. These programs can also automatically monitor and execute contractual terms when meeting certain conditions.
The members of a blockchain consortium process transactions only after successful verification by a smart contract, which allows enforcement of terms and conditions around an agreement similar to traditional contracts. In addition, smart contracts define criteria based on which two parties can agree to exchange and retract information. A gamification system enables parties to reward each other for following specific policies or activities.
Ethereum
Ethereum is a full-fledged blockchain framework and network with a built-in Turing-complete programming language called Solidity for creating “smart contracts”. The traditional Ethereum network allows transactions of its Ether cryptocurrency. Additionally, the Ethereum network also offers the opportunity for developers to host their non-crypto currency applications on their public network. Developers need not worry about hosting and maintaining their infrastructure or mining for blocks and can focus on developing business applications that matter. Alternatively, Ethereum also offers a framework to deploy the blockchain network in a private infrastructure when critical business solutions require.
EV Charging
A possible application for blockchain is a distributed system for charging electric vehicles enabling their owners to monetise them through an automated system when not in use. Since most electronic vehicle charging stations remain unused for large portions of the day, they are a good candidate for sharing economy business models. An important issue is to minimise the transaction costs for renting charging stations handled through smart contracts. The price most people are willing to pay for a few hours of charging is likely to be below the transaction costs when using traditional mechanisms involving trusted third parties to handle the transaction. Private rental of electronic vehicle chargers will offload public charging infrastructure and contribute to evening the loads on the electrical grid, which is beneficial to grid owners. In addition, such a system generates revenues for charging station owners.
Microgrid planning and trading
The move to decentralise energy sources has led to the emergence of prosumers with rooftop PV solar panels. The current trend across Europe is arbitrary excess energy generation and wastage during the summer months. Most prosumers lack proper mechanisms to store extra energy or trade it with their peers or the grid. Utility companies also lack the appropriate information to prepare them better to optimise energy generation, integration, and supply in this volatile landscape. Blockchain-based innovative energy solutions would allow utility companies to incentivise customers to log their consumption and production data. They can define smart contracts that provide rewards and loyalty points to their customers for sharing data and set prices for repurchasing energy from their customers. Customers can choose to sell their excess power to the grid or even to their peers and claim rewards to redeem in their energy bills.
Energy Usage Change through Gamification and Incentivisation
Promoting energy efficiency at home is a significant recognised factor for decarbonisation and reducing greenhouse gas emissions. As a result, public institutions and utility companies have actively invested in campaigns and proposals for better energy usage behaviour, which has become more relevant with the influx of electronic vehicles. The majority of these initiatives have led to the understanding that continued behaviour change requires some form of incentivisation for individuals to adjust their practices. For example, utility companies could provide weekly gamification tasks to their customers associated with rewards. Examples of such studies could be limiting the usage of specific appliances (e.g., ‘No Washing Machine on Wednesdays’).
Grid of Everything
Another recent development is enabling home or personal utilities as a grid, which is particularly relevant for the case of electric vehicle batteries, which could become part of the grid and store or supply energy to a neighbourhood during idle periods. Incentivised individuals participate in a sharing economy to rent their electric vehicle batteries during office hours, night parking, or vacations, reducing the cost associated with electricity generation and distribution. Recording the utilisation of an individual’s electric vehicle battery on the Blockchain allow utility companies to rent them hourly. In addition, individuals could receive rewards redeemed when paying other services such as parking or monthly energy bills.
The energy use case of the ARTICONF platform (RenewLedger) implemented a blockchain-based peer-to-peer energy trading platform that incorporates leading technologies in IoT, blockchain, and artificial intelligence that offers a realistic view on optimising a microgrid in an integrated scenario. The solution measures and forecasts local consumption and production through an energy management system. Smart contracts on the blockchain allow the platform to facilitate local trading and enforce matches between demand and supply. A prosumer produces energy locally, and their household then consumes this energy while pushing the surplus as a sales order onto the marketplace. Meanwhile, a community member with an energy shortage will make a demand order to the market. The energy management system forecasts demand and supply, and the blockchain takes care of the matching and enforcing of the contracts. The developed solution enables unforeseen insight into energy consumption and production and extensive prediction capability. Consumers benefit from lower prices for locally produced energy, while prosumers can generate revenues on their sold surplus. Grid operators benefit from operational and capital spending savings as disbalances settle locally, resulting in an efficient, predictable, secure, and transparent grid.
This blog post was written by the bitYoga team in February 2022.
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